BI Ltd Has 7,000,000 Ordinary Shares on Issue at the Beginning

question 29

Multiple Choice

BI Ltd has 7,000,000 ordinary shares on issue at the beginning of the year,1 July 2004.These shares were issued at $4.50 each and have a current market value of $8.00.On 1 September 2004,BI Ltd bought back 500,000 ordinary shares originally issued at $4.50 for $6.50 each.On 1 December 2004,1,000,000 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 2005 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 per cent.The dividends were not paid this period.
For the year ended 30 June 2004,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 2005?

• A) None required because the company made a loss.
• B) ($0.15)
• C) $0.20
• D) ($0.14)
• E) None of the given answers.