QUESTION 6

For the year ending 30 June 2020, Helium Ltd earned a net profit after tax amounted to $2 000 000.Dividends on 400 000 convertible, cumulative preference shares amounted to $800 000.The preference shares have been disclosed as equity in the statement of financial position.As at 1 July 2019 there were 600 000 fully paid ordinary shares.There were no additional shares issued during the year.

As at 1 July 2019 there were also:

30 000 ordinary share options currently on issue with an exercise price of $1.50; and

the 400 000 convertible, cumulative preference shares issued are convertible into a total of

160 000 ordinary shares at the option of the preference shareholders.

Additional Information

The company tax rate is 30% and the average market price for ordinary shares during the year was $2.00.

Required

Calculate diluted earnings per share for the year ending 30 June 2020.Show all workings and steps required in determining diluted earnings per share.