Reference no: EM133012216

For the year ending 30 June 2014, Sirra Ltd reports the following:

Net profit after tax of $600 000.

As of 1 July 2013, Sirra Ltd had 300 000 fully paid ordinary shares. The following issues and purchases were subsequently made during the year:

• 200 000 fully paid ordinary shares issued on 1 September 2013 at the prevailing market price
• 35 000 fully paid ordinary shares purchased back on 1 February 2014 at the prevailing market price
• 60 000 partly paid ordinary shares issued on 1 April 2014 at an issue price of $3.00. The shares were partly paid to $2.30. The partly paid shares carry the right to participate in dividends in proportion to the amount paid as a fraction of the issue price.

For the entire financial year Sirra Ltd had 1 million $1.00 preference shares, which provide dividends at a rate of 10 per cent per year. The dividend rights are cumulative. The preference share dividends were not treated as part of interest expense.

Required:

Problem 1: Compute the basic earnings per share amount for 2014.