Mary Ltd determined its profit attributable to ordinary shareholders for the reporting period ended 30 June 2014 as $720 000. The number of ordinary shares on issue up to 31 October 2013 was 50 000. Mary Ltd announced a two-for-one bonus issue of shares effective for each ordinary share outstanding at 31 October 2013.
Basic earnings per share at 30 June 2014 is:

Question

Quizplus · Accepted Answer

The bonus issue increases the number of shares to 150,000 (50,000 original shares + 100,000 bonus shares). Basic EPS = Profit / Number of shares = $720,000 / 150,000 = $4.80.

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