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Question 5 EPS Group is a publicly listed company for the last two years. You are presented with a summary of the Group's Equity and Non-Current liabilities for the year ended 31 December 2017 together with the Statement of Comprehensive Income for the year ended 31 December 2017 with comparative figures for the year ended 31 December 2016. Summary of Equity and Long Term Liabilities as at 31/12/2017 Note(i)&(0) Ordinary Share Capital with N.V. of 0.80 each Share Premium 6% Preference shares(non-redeemable) Retained Profits Total Equity 5% Convertible Loan stock Total equity plus Non-Current Liabilities 160,000 20,000 50,000 39,700 269,700 60,000 329.700 Note (iii) Statement of Comprehensive Income of 31/12/2017 31/12/2016 Revenue Cost of sales Gross Profit Operating Expenses Profit before interest and tax 840,000 (672,000) 168,000 (95,000) 73,000 525,824 (394,368) 131,456 (80,000) 51,456 Loan interest Profit before tax (3,000) 70,000 (3,000) 48,456 Taxation (7,000) Profit for the year 63,000 This Question continues on the next page. (5,456) 43,000 Additional Information On the 01/08/2017 a bonus issue of shares was made on the basis of one bonus Ordinary share for every four Ordinary shares held. The bonus issue has not yet been accounted for. On the 01/10/2017 a rights issue was made on the basis of one ordinary share at an issue price of 1.05 per share for every eight Ordinary shares held. The market value of an Ordinary Share before Rights Issue was 1.40. The right issue has not yet been accounted for. The convertible loan stock conversion rate from 2020 onwards is as follows; 115 ordinary shares for every 100 of Loan stock. (iv) The rate of corporation tax is 12.5% for both years. There were no issues of Preference share capital during yle 31/12/2017. (vi) There were no issues of Loan stock during year ended 31/12/2017. Required (a) Calculate the basic Earnings Per Share-EPS as at 31/12/2016 at the time the 2016 Financial Statements were being prepared. [3 marks] (b) Calculate the basic Earnings per Share-EPS as at 31/12/2017. [7 marks Calculate the adjusted EPS as at 31/12/2016 that would be shown in the 2016 financial statements where the 2016 income statement is presented as a comparative in the 2017 income statements. [2 marks] Calculate the Diluted Earnings per Share at 31/12/2017 [7 Marks] Discuss briefly why diluted Earnings per Share should also be presented in Financial Statements. [6 marks) [25 marks