Question 1

SECTION A

Meridian PLC had 2,000,000 ordinary shares in issue on 1 January 20X9. On 1 July 20X9, Meridian made a 1-for-4 bonus issue. Profit after tax for the year ended 31 December 20X9 was $750,000.

What is the basic Earnings Per Share (EPS) for the year ended 31 December 20X9?

Accepted Answer

Calculate the number of bonus shares. Remember that under IAS 33, bonus issues are not time-apportioned; they are treated as if they occurred at the start of the earliest period presented.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Time-apportioning the bonus shares because they were issued halfway through the year.

SECTION A

Meridian PLC had 2,000,000 ordinary shares in issue on 1 January 20X9. On 1 July 20X9, Meridian made a 1-for-4 bonus issue. Profit after tax for the year ended 31 December 20X9 was $750,000.

What is the basic Earnings Per Share (EPS) for the year ended 31 December 20X9?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FR — Financial Reporting Practice Exam 3

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