Dormant Ltd has a net income after tax of $2 540 000 for the year ended 30 June 2015.At the beginning of the period Dormant Ltd had 3 000 000 fully paid-up ordinary shares on issue.On 1 November 2014,Dormant Ltd makes a rights issue of 1 fully paid share for every 6 shares held.The required payment for the rights issue shares was $2.00.The last cum rights price was $3.00.What are the basic earnings per share for the period ended 30 June 2015 in accordance with AASB 133?

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The basic earnings per share is calculated as the net income after tax divided by the weighted average number of ordinary shares on issue during the period. The weighted average number of ordinary shares on issue is calculated as the number of shares on issue at the beginning of the period plus the number of shares issued during the period multiplied by the proportion of the period that the shares were on issue. In this case, the number of shares on issue at the beginning of the period is 3,000,000 and the number of shares issued during the period is 500,000 (3,000,000 x 1/6). The shares issued during the period were on issue for 8/12 of the period (from 1 November 2014 to 30 June 2015). Therefore, the weighted average number of ordinary shares on issue during the period is 3,000,000 + (500,000 x 8/12) = 3,333,333. The basic earnings per share is therefore $2,540,000 / 3,333,333 = $0.76.

Dormant Ltd Has a Net Income After Tax of $2