Question
IFA Corporations had Net Income of $780,000 and the following information for January 2021 to December 2021. Ordinary shares issued and outstanding: Jan 1 500,000
IFA Corporations had Net Income of $780,000 and the following information for January 2021
to December 2021.
Ordinary shares issued and outstanding:
Jan 1 500,000 shares
March 1 300,000 shares.
June 1 A 10% share dividend
August 1 120,000 shares.
October 1 700,000 shares.
December 1 A 2 for 1 share split
On January 1, 10% convertible debentures, $60,000,000 face value, were issued at par. Each
$1,000 debenture is convertible into 40 ordinary shares. The interest expense for the current year
related to the liability component of the convertible debentures is $6,500,000.
250,000 preference shares outstanding, $60 par, 10% cumulative, not convertible.
Options were granted to purchase 400,000 ordinary shares at $18 each. The companys average
market price of ordinary shares was $24.
10-year $3,000,000 face value, 8% bonds issued at par on May 1. Each $500 bond is convertible
into 30 ordinary shares. The interest expense on the liability component of convertible bonds for
the year was $360,000
The tax rate was 30%
Requirement
Calculate the basic earnings per share for 2021. (4 marks)
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