Reference no: EM132646368

Problem - For the year ending 30 June 2020, Granite Lid reports the following:

(a) Net profit after tax of $1.2 million.

(b) Granite Lid commenced the year with 400 000 fully paid ordinary shares. During the year the company:

Issued 80 000 fully paid ordinary shares on 1 November 2019 at the prevailing market price.

Purchased back 50 000 fully paid ordinary shares on 1 March 2020 at the prevailing market price.

Issued 100 000 partly paid ordinary shares on 1 June 2020 at an issue price of $2.00. The shares were partly paid to $1.00. The partly paid shares carry the right to participate in dividends in proportion to the amount paid as a fraction of the issue price.

(c) For the entire year, Granite Ltd had 500 000 $1.00 preference shares, which provide dividends at a rate of 10 per cent per year. The dividend rights are cumulative. The preference shares were disclosed as equity.

REQUIRED - Compute the basic earnings per share for Granite Ltd for 2020.