Margaret Ltd determined its profit attributable to ordinary shareholders for the reporting period ended 30 June 2022 as $840 000. The number of ordinary shares on issue up to 31 October 2022 was 50 000. Margaret Ltd announced a two-for-one bonus issue of shares effective for each ordinary share outstanding at 31 October 2022. Basic earnings per share at 30 June 2023 is:

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The basic earnings per share (EPS) is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares during the period. Before the bonus issue, there were 50,000 shares. After the two-for-one bonus issue, the number of shares triples (1 original + 2 bonus for each original share), making it 150,000 shares. The profit is $840,000. Therefore, EPS = $840,000 / 150,000 = $5.60.

Margaret Ltd Determined Its Profit Attributable to Ordinary Shareholders for the Reporting