Calculate the basic earnings per share for the year

Assignment Help Accounting Basics

Reference no: EM132971862

Question 1

Abuu Ltd had 100,000 shares in issue, but then makes a 1 for 5 rights issue on 1 October 2019 at a price of TAS 1,000. The market value on the last day of quotation with rights was TAS 1,600. Total earnings are TAS 50,000,000 in 2019, and TAS 40,000,000 in 2018.

Required:
Calculate the Basic Earnings per Share for the year ended 31 December 2019 and the corresponding figure for 2018 in accordance with IAS 33: Earnings per Share.

Question 2
(a) The accountancy profession in Tanzania is solely regulated by the National Board of Accountants and Auditors (NBAA). The NBAA adopted IFRSs and IFRS for Small and Medium-sized Entities (SMEs) for application in Tanzania without modifications and including effective dates in 2004 and 2010, respectively. Required:

i. Identify nature of entities that must apply full version of IFRSs as per NBAA requirements. (8 marks) ii. Explain possible reasons for the requirement in (i) above.

Question 3
IAS 10: Events After the Reporting Period sets out guidance for dealing with events which occur after the reporting date but which may have implications for the financial statements up to the reporting date, It d(stinguishes between adjusting events and non adjusting events.

George Plc is in the process of finalising its financial statements for year ended 31 March 2019. The draft statements were completed on 14 April 2019. and the audit Is currently in progress. The financial statements are expected to be approved by the board of directors on 15 May 2019, and published on 20 May 2019. The following matters have come to light during the audit and your advice is requested. No adjustment has yet been made for any of the following.

(i) Closing inventory at 31 March 2019 includes 100 items carried at cost TAS 5,000,000 each. New safety regulations were announced on 5 April 2019 with immediate effect. The items of inventory do not comply these regulations.

As a result, the net realisable value of the inventory is only TAS4,500,000 each, 10 (ii) An investment in unquoted equity instruments was held by George Plc at 31

March 2019 at an amount of TAS 3,500 million, This was its fair value on 30 September 2016, the most recent reporting date. Due to the unavailability of professional valuers, an updated fair value was not available until 15 April 2019. On this date, the valuer provided an estimate of fair value of TAS 2,800 million.

(iii) George Plc was being sued on 31 March 2019. At that date the case had been heard, but the judgment was only handed down on 20 April 2019. The outcome was that George was found liable for damages and costs totaling TAS 3,100 million. On 21 April 2019, George filed a claim with its insurers and on 28 April 2019, was notified that the insurer would cover TAS 2,600 million of the loss.

(iv) On 30 March 2019, George paid TAS 500,000 for a raffle ticket to support a local charity. On 3 April 2019, the company was notified that it had won first prize of TAS 100,000,000 The draw took place on 31 March 2019.Required:

(a) Discuss the concepts of "adjusting" and "non-adjusting" events as defined by IAS10 Events After the Reporting Period/ and explain the accounting treatment (8 marks)and disclosures required in each case.

(b) In each case (i) to (iv) GIVE A briefing note advising on the accounting treatment and / or disclosures required as a result of the event(s) (12 after marks)the reporting date.

Reference no: EM132971862

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