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The information below relates to ABC Ltd for the period ended 31 June 2021 Revenue 800,000 Cost of sales 150,000 Other operating expenses 50,000 Operating

The information below relates to ABC Ltd for the period ended 31 June 2021

Revenue 800,000 Cost of sales 150,000 Other operating expenses 50,000 Operating expenses 120,000 Finance Income 75,000 Finance expenses 25,000 Goodwill impairment losses 100,000 Depreciation 50,000 Profit on sale of discontinued operations(before tax) 150,000

Tax is calculated at 32% of profit

Issued Share capital: 1 000 000 ordinary shares 500 000 cumulative preference shares at a value of 1 NAD each , fixed dividend of 5c per share.

Additional information Declared dividends: Ordinary Dividends NAD 100,000 Preference dividends NAD 100,000 Dividends have been declared and paid out on the 31 June 2021 100 000 11% convertible debentures of 2 NAD each were issued on the 31 December 2020. These will be convertible into ordinary shares at the option of the issuer. 11% can be considered to be market related to similar instruments. On the 01 January 2020, 200 000 share options have been issued to employees of ABC Ltd.

Options are to exercise on or before the 01 January 2023 at 2.50 NAD per share for every 2 options held.

Average Market price of ordinary shares for ABC Ltd is 3 NAD per share, throughout the 2021 financial period.

New shares have been issued by ABC Ltd on one ordinary share for every five ordinary shares held at 3 NAD per share on the 30 April 2021 during the current financial year as well as capitalization issue of one ordinary share for every 100 shares held on the 31 May 2021.

Required:

a) Give a brief explanation of the difference between earnings per share, diluted earnings per share as well as headline earnings per share (10)

b) Present the disclosures to the financial statements concentrating on the notes below:

-Earnings per share (10)

-Diluted earnings per share (10)

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