Cerdas Berhad issued additional shares and bought back shares during 2013. Their net profit for 2013 was RM83,500,000. The document provides information needed to calculate basic EPS for Cerdas Berhad for 2013. The document also provides MBM Berhad's capital structure, earnings information, and additional details needed to calculate basic and diluted EPS for MBM Berhad for 2013. Legasi Bhd reported net income of RM2,000,000 for 2013. The document provides details of Legasi Bhd's share transactions and convertible instruments to enable calculation of basic and diluted EPS for Legasi Bhd for 2013.

1. BKAF3063 FINANCIAL ACCOUNTING AND REPORTING III
SEMESTER 1 2014/2015
TUTORIAL 4: EARNINGS PER SHARE
Submission date: 2 November 2014
QUESTION 1
Cerdas Berhad has issued 170,000,000 ordinary shares of RM1 each as at 1 January
2013. During the current year ended 31 December 2013, the following share transactions
were undertaken by the company:
31 March 2013 Issued 80,000,000 ordinary shares for cash at a price of RM6 per share
31 October 2013 Bought back 30,000,000 ordinary shares an average price of RM6.50
per share
Net profit attributable to ordinary shares for the year ended 31 December 2013 was
RM83,500,000
REQUIRED:
Compute the basic EPS for Cerdas Bhd for the year ended 31 December 2013.
QUESTION 2
Below is an extract of income statement of MBM Berhad for the year ended 31
December 2013.
2013
RM
Profit before tax 3,225,728
(-) Taxation (903,204)
Net profit 2,322,524
Attributable to:
Owners of the company
Non-controlling interest
1,723,400
599,124
The capital structures of MBM Berhad on I January 2013 is as follows:
2013
Outstanding shares:
Ordinary shares, RM1 each 1,800,000
6% convertible preference shares, RM100 each 40,000 units
8% Convertible bonds RM2,000,000
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2. Additional information:
1. The 6% convertible preference shares are cumulative preference shares and
each unit is convertible into 15 units of ordinary shares.
2. The 8% convertible bonds is convertible into 300 units of the ordinary shares
for each RM1,000 bonds. On 1 April 2013, RM200,000 were converted into
ordinary shares.
3. In early 2012, the company granted options to its employees to buy the
ordinary shares totaled 120,000 units for RM20.00 each. No option has been
exercised so far and the exercise date dues on 31 December 2015.
4. The company declared a 1 for 1 bonus issue on 1 July 2014.
5. On 1 October 2013, the company issued additional 100,000 units of ordinary
shares.
6. The average price of ordinary shares for the year 2013 was RM24.00 each
share.
7. The tax rate for the year 2013 was 25%.
REQUIRED: (Round your answer to the nearest cent).
(a) Determine the weighted average of outstanding shares used for calculating the
basic earnings per share for the year 2013.
(b) Calculate the basic earnings per share for the year 2013.
(c) Calculate the diluted earnings per share for the year 2013 (support with
calculations).
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3. QUESTION 3
Legasi Bhd which was incorporated in 2010 has reported net income of RM2,000,000 for
the year ended 31 December 2013. The tax rate is 25%. Its capital structure included:
Ordinary Shares
1 January 2013 4,000,000 ordinary shares outstanding
1 July 2013 1,500,000 new shares issued
1 October 2013 1,000,000 shares reacquired as treasury shares
The average market price of ordinary shares during 2013 was RM25 per share.
Convertible Preference Shares
On 1 January 2013, RM4,000,000, 8% cumulative, convertible preference shares at a par
value of RM50 were issued and outstanding. Each of convertible preference shares is
convertible into 20 ordinary shares. There were no preference dividends in arrears;
however, Legasi Bhd has not declared preference shares dividends for the year 2013.
Share Options
Options were granted in 2011 to purchase 500,000 ordinary shares at RM20 per share. No
options were exercised during fiscal year 2013.
Convertible Bonds
On I January 2013, Legasi Bhd has 10% convertible bonds at a carrying amount of
RM3,000,000. This convertible bonds have been issued in 2010 and will be converted
into 600 ordinary shares per RM1,000 bonds. On 1 September 2013, 70% of the
convertible bonds have been converted into ordinary shares.
REQUIRED:
(Round the answer to three decimal points)
(a) Determine the weighted average of shares outstanding and calculate the basic
earnings per share for the year ended 31 December 2013.
(b) Calculate the diluted earnings per share for the year ended 31 December 2013.
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