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The following summarised information is available in relation to La Scan, a publicly listed company in Australia: Statement of comprehensive income extracts for years ended

The following summarised information is available in relation to La Scan, a publicly listed company in Australia:

Statement of comprehensive income extracts for years ended 30th June:

2018

2017

Continuing

Discontinued

Continuing

Discontinued

$000

$000

$000

$000

Profit after tax from:

Existing operation

2,000

(750)

1750

600

Newly acquired operations*

450

nil

* Acquired on the 1st November 2017

Analyst expect profits from the market sector in which La Scans existing operations are based to increase by 6% in the year to 30th June 2019 and by 8% in the sector of its newly acquired operations.

On 1st July 2016 La Scan had:

$12 million of $1 ordinary shares in issue.

$5 million 8% convertible debentures 2023; the terms of conversion are 40 equity shares in exchange for each $100 of debenture.

On 1 January 2017 the directors of La Scan were granted options to buy 2 million shares in the company for $1 each. The average market price of La Scans shares for the year ending 30th June 2018 was $2.50 each.

Assume an income tax rate of 30% for year 2016,2017 and 2018

Required:

(i) Calculate La Scans estimated profit after tax for the year ending 30 June 2019 assuming the analysts expectations prove correct;

(ii) Calculate the diluted earnings per share (EPS) on the continuing operations of La Scan for the year ended 30 June 2018 and the comparatives for 2017.

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