Daisy Ltd Has a Net Income After Tax of $2,000,000

question 3

Multiple Choice

Daisy Ltd has a net income after tax of $2,000,000 for the year ended 30 June 2003.At the beginning of the period Daisy Ltd has 900,000 fully paid-up ordinary shares on issue.On 1 December 2002 Daisy Ltd had issued a further 300,000 fully paid-up ordinary shares at an issue price of $2.00.On 1 March 2003 Daisy Ltd made a 1 for 6 bonus issue of ordinary shares out of retained earnings.The last sale price of an ordinary share before the bonus issue was $2.50.At the beginning of the current period Daisy Ltd also had 500,000,$1.00,5 per cent cumulative preference shares on issue.The dividends on the preference shares are not treated as expenses in the income statement. The basic earnings per share for the period ended 30 June 2002 was $1.50 per share.What are the earnings per share figure for the period ended 30 June 2003 and what are the comparative earnings per share for the previous year to be reported in the 2003 financial reports according to AASB 133?

• A) Current period (2003): $1.58; Previous period (2002): $1.29
• B) Current period (2003): $1.60; Previous period (2002): $1.75
• C) Current period (2003): $1.73; Previous period (2002): $1.29
• D) Current period (2003): $1.75; Previous period (2002): $1.75
• E) None of the given answers.

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