Question Three On 31 December 20X1, the issued share capital of a company consisted of 4,000,000 ordinary shares of 25c each. On 1 July 20X2 the company made a rights issue in the proportion of 1 for 4 at 50c per share when the shares were quoted at R1.15. The profit after tax for the year ended 31 December 20X2 was R425,000. The reported earnings TAS 33. per share for the year ended 31 December 20X1 was 8c. Required: Calculate the basic EPS for the year ended 31 December 20X2, together with the comparative for 20X1 that would be presented in the 20X2 financial statements. Theoretical Ex - rights price. Before the issue . 4 shares at 1.15. 3 4.60 26 Rights issue : I shave issued @ 0.50 o. SO S shares valued at 5:10 Theoretical Ex Rights price = # 5.10 / 5 = 1. 02 per share EPS for the year ended 31 Dec 20* 2 Number of shares first biths 4000 00 0 x 6/12 x509. /1.02 1 1. 15 = 22 5 4901. 96. Number of Shares ols for last 6months 500 0 000 x 6 /12 = 2 500 000 Weighted averagenumber of showes 4 75 490 2 outstanding Basic EPS = Earnings / Wrighted average number of shares als. 425000 / 4754902 - Reends. 8. 94 cent Comparitive figure for 20. x1 = 8 cents. profit after tax 20. x 1 = 0.08 x 4000 000 = 320 000 The basic EPS in 20. X1 was 8 cents but comparifive Figure of 20 *1 that would be presented in 20 x2 Financial statements will be 320 000 / 40100 000 x 1 15 = next 2 cents 9.02