31.AASB 133 requires partly paid ordinary shares to be accounted for in the calculation of earnings per share by:
A. including in the number of ordinary shares the partly paid ordinary share equivalents weighted by the proportion of the total issue value of the share that was paid up at the end of the reporting period.
B. including in the number of ordinary shares the partly paid ordinary share equivalents calculated as a proportionate weighted average of the total market capitalisation of the fully paid-up shares defined as ordinary according to AASB 133.
C. including in the number of ordinary shares the ordinary share equivalents represented by the proportionate rights of partly paid shares to participate in dividends, weighted by the proportion of the total number of days in the period that the partly paid shares were entitled to those rights.
D. excluding them from the calculation completely.
32.Beuno Ltd has 3 000 000 ordinary shares on issue at the beginning of the year, 1 July 2014. These shares were issued at $2.00 each and at the end of the period have a current market value of $4.50. On 1 August 2014, Beuno Ltd bought back 600 000 ordinary shares originally issued at $2.50 for $3.00 each. On 1 November 2014, 500 000 shares were issued fully paid up at the current market value of these shares. On 1 March 2015, 200 000 partly paid-up ordinary shares were issued at an issue price of $3.50. These shares were partly paid to $2.00. The partly paid shares are permitted proportionate rights to vote and receive dividends based on the relationship between the amount paid up and the issue price. What is the weighted-average number of shares calculated in accordance with AASB 133?
A. 2 782 466
B. 2 797 613
C. 2 799 918
D. 2 820 665
33.Benjy Ltd has 8 000 000 ordinary shares on issue at the beginning of the year, 1 July 2015. These shares were issued at $1.00 each and have a current market value at the end of the period of $5.20. On 1 September 2015, Benjy Ltd bought back 1 000 000 ordinary shares originally issued at $1.50 for $4.00 each. On 1 February 2016, 2 000 000 shares were issued at the current market value of these shares. On 1 March 2016, 900 000 partly paid-up ordinary shares were issued at an issue price of $5.00. These shares were partly paid to $4.00. Shares are not granted proportionate rights to receive dividends. This right attaches only when the shares are fully paid. The shares, however, do provide a proportionate right to vote at annual general meetings. What is the weighted-average number of shares calculated in accordance with AASB 133?
A. 8 232 438
B. 8 083 333
C. 7 991 781
D. 8 803 333
34.Cavendish Ltd has 2 000 000 ordinary shares on issue at the beginning of the year, 1 July 2014. These shares were issued at $2.00 each and at the end of the period have a current market value of $4.50. On 1 August 2014, Cavendish Ltd bought back 300 000 ordinary shares originally issued at $2.50 for $3.00 each. On 1 November 2014, 800 000 shares were issued fully paid up at the current market value of these shares. On 1 March 2015, 300 000 partly paid-up ordinary shares were issued at an issue price of $3.50. These shares were partly paid to $2.00. The partly paid shares are permitted proportionate rights to vote and receive dividends based on the relationship between the amount paid up and the issue price.
For the year ended 30 June 2015, the net income after tax was $1 050 000.
What are the basic earnings per share for Cavendish Ltd for the year ended 30 June 2015?
A. $0.24
B. $0.45
C. $0.46
D. $0.49
35.Craven Ltd has 10 000 000 ordinary shares on issue at the beginning of the year, 1 July 2013. These shares were issued at $0.50 each and have a current market value of $3.00. On 1 November 2013, Craven Ltd bought back 1 000 000 ordinary shares originally issued at $0.50 for $1.90 each. On 1 February 2014, 1 500 000 shares were issued fully paid up at the current market value of these shares. Also during the period, 500 000 partly paid-up ordinary shares were issued. They were issued on 1 April 2014 at an issue price of $2.90. These shares were partly paid to $1.80. The partly paid shares are permitted proportionate rights to vote and receive dividends based on the relationship between the amount paid up and the issue price.
Craven Ltd has 3 000 000, $1.00 preference shares that provide cumulative dividends at a rate of 8%.
For the year ended 30 June 2014, the net income after tax was $20 000 000.
What are the basic earnings per share for Craven Ltd for the year ended 30 June 2014?
A. $1.99
B. $2.00
C. $1.96
D. $1.53
36.BI Ltd has 7 000 000 ordinary shares on issue at the beginning of the year, 1 July 2014. These shares were issued at $4.50 each and have a current market value of $8.00. On 1 September 2014, BI Ltd bought back 500 000 ordinary shares originally issued at $4.50 for $6.50 each. On 1 December 2014, 1 000 000 shares were issued fully paid up at the current market value of these shares. Also during the period, 800 000 partly paid-up ordinary shares were issued. They were issued on 1 February 2015 at an issue price of $7.20. These shares were partly paid to $4.50. The partly paid shares are permitted proportionate rights to vote and receive dividends based on the relationship between the amount paid up and the issue price.
BI Ltd has 1 000 000, $1.00 preference shares that provide non-cumulative dividends at a rate of 10%. The dividends were not paid this period.
For the year ended 30 June 2014, the net loss after tax was $1 000 000.
What are the basic earnings per share for BI Ltd for the year ended 30 June 2015?
A. none required because the company made a loss
B. ($0.15)
C. $0.20
D. ($0.14)
37.AASB 133 requires a bonus issue made during a period to be treated by:
A. removing the effect of the bonus issue by deflating the number of shares to the equivalent of the weighted-average number of ordinary shares that would have been on issue in the period if the bonus issue had not taken place.
B. no adjustment required; the calculation of the weighted-average number of shares issued during the period automatically takes into account the effect of issuing more shares.
C. increasing the number of shares issued before the bonus issue as if the bonus issue had been made at the beginning of the period. Previous period's earnings per share reported for comparative purposes should also be adjusted for the effect of the bonus issue.
D. calculating the earnings per share both by deflating the number of shares issued to pre-bonus issue numbers so that the earnings per share may be compared to previous periods and also calculating the 'post-bonus issue' earnings per share as a basis for continuing comparison in future periods.
38.The calculation of the theoretical ex-rights price of a share may be expressed as:
A. aggregate market price per share immediately prior to exercise of rights plus dividends receivable on the shares divided by number of shares outstanding after the exercise of rights.
B. aggregate market price per share immediately prior to exercise of rights plus proceeds from the exercise of rights divided by number of shares outstanding after the exercise of rights.
C. aggregate market price per share immediately after the exercise of rights plus proceeds from the exercise of rights divided by number of shares outstanding before the exercise of rights.
D. aggregate market price per share immediately after the exercise of rights plus proceeds from the exercise of rights divided by number of shares outstanding after the exercise of rights.
39.The effect of a bonus issue on the market value of an entity's equity is:
A. The number of shares is increased, meaning that each shareholder benefits from the conversion of retained earnings into additional shares. Each shareholder benefits proportionately equally, however, so their relative positions remain the same.
B. The total equity of the entity remains the same, apart from the reclassification of reserves used to make the bonus issue. Each shareholder benefits from the ability to sell off the additional shares provided, so the market value of the entity remains the same.
C. The market price is observed to drop as a result of the increased supply of shares for sale because shareholders often respond to a bonus issue by selling off the 'windfall' shares.
D. Theoretically it should have no effect, but empirical evidence suggests that a bonus issue is used to signal an increase in dividends, so the total market value of the entity does sometimes increase.
40.Gaslight Ltd has earnings after tax of $1 260 000 for the year ended 30 June 2015. At the beginning of the period Gaslight had 570 000 fully paid-up ordinary shares on issue. On 30 December 2014 the company made a one-for-two bonus issue. The last sale price of the shares immediately prior to the bonus issue was $4.50 each. What are the earnings per share taking into account the bonus issue?
A. $3.32
B. $1.47
C. $1.87
D. $3.00
