Nagoya Berhad, a company that produces women's clothing successfully expanded its business worldwide. The basic earnings per share for the year ended 30 June 2020 was 24.06 cents and Nagoya Berhad issued 2,500,000 RM1 ordinary shares on 1 July 2020. The following information related to Nagoya Berhad for the year ended 30 June 2021:

(1) The ordinary shareholders of Nagoya Berhad held options to purchase 500,000 ordinary shares at RM1.55 per share on 1 January 2021. The options are exercisable between 1 July 2022 and 31 June 2023. No further options were issued in the year. Besides that, the average market value of one ordinary share of Nagoya Berhad at the year ended 30 June 2021 was RM2.00 each.

(2) On 1 September 2020, the company made bonus issues of 1:2.

(3) On 1 February 2021, Nagoya Berhad issued 1,500,000 ordinary shares at the market price of RM1.50 each to acquire a business.

(4) Given below is the income summary for Nagoya Berhad for the year ended 30 June 2021:

REQUIRED:

(i) Calculate the basic earnings per share to be reported in the financial statements of Nagoya Berhad for the year ended 30 June 2021 including the comparative figure.

(ii) Calculate the diluted earnings per share for the year ended 30 June 2021. (A comparative figure is NOT required). 

(iii) “Company’s earnings per share might be one of the most important figures to know about a company’s performance, as it could mean great success or imminent failure.” Comment on the above statement.
 

Transcribed Image Text:

Profit before taxation Taxation Ordinary dividends RM'000 2,400 (500) (110) Profit before taxation Taxation Ordinary dividends RM'000 2,400 (500) (110)

Answer rating: 100% (QA)

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