Bremang Ltd’s draft profit after tax for the year ended 31 October 2018 is GH¢10.2 million. At the beginning of the financial year, the company had 3.6 million, GH¢1 ordinary shares in issue. On 1 February 2018, the company entered into an arrangement with a supplier where the supplier would be given 48,000 GH¢1 ordinary shares in Bremang Ltd in return for services with a fair value of GH¢600,000 at 1 February 2018 to be performed evenly over the period 1 February 2018 to 31 January 2019. The shares were delivered on 31 January 2019 and earned proportionately over the year to 31 January 2019 as the services were rendered. The arrangement has not been recognised in the draft financial statements.
Required:
Calculate the basic earnings per share figure for Bremang Ltd for the year ended 31 October 2018(to the nearest pesewas) in accordance with IAS 33: Earnings per Share. (Note: There is no tax or deferred tax consequences of the share issue). (4 marks)
View Solution
Basic earnings per share = (GH¢10,200,000 – (GH¢600,000 x 9/12)) / 3,613,500 = GH¢2.70.