Rose Ltd Has a Net Income After Tax of $3,400,000

question 26

Multiple Choice

Rose Ltd has a net income after tax of $3,400,000 for the year ended 30 June 2005.At the beginning of the period Rose Ltd has 1,800,000 fully paid-up ordinary shares on issue.On 1 October 2004 Rose had issued a further 200,000 fully paid-up ordinary shares at an issue price of $5.00.On 1 May 2005 Rose Ltd made a 1 for 4 bonus issue of ordinary shares out of retained earnings.The last sale price of an ordinary share before the bonus issue was $5.50.The basic earnings per share for the period ended 30 June 2004 was $2.00 per share.What are the earnings per share figure for the period ended 30 June 2005 and what are the comparative earnings per share for the previous year to be reported in the 2005 financial reports according to AASB 133?

• A) Current period (2005): $1.67; Previous period (2004): $2.00
• B) Current period (2005): $1.34; Previous period (2004): $2.50
• C) Current period (2005): $1.83; Previous period (2004): $1.50
• D) Current period (2005): $1.40; Previous period (2004): $1.60
• E) None of the given answers.

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Definitions:

Weber Fraction

A principle that quantifies the perception of change in a given stimulus according to the Just Noticeable Difference (JND).

Sense Modality

A way in which sensory information is processed, including vision, hearing, touch, taste, and smell.

Response Criterion

A threshold in decision making or sensory detection beyond which a stimulus is perceived or a response is made.

Weber's Law

A principle in psychophysics stating that the smallest change in a stimulus that can be detected is a constant proportion of the original stimulus’s intensity.