Gce Model Questions Vol1 2021 Financial Accounting Question 45
Practice objective / multiple choice question 45 from the 2021 Gce Model Questions Vol1 Financial Accounting examination.
At the beginning of the year a company has 10,000 ordinary shares of \(£1\) each and 5,000 cumulative 6 % preference shares of \(£2\) each, all fully paid. During the year the company earned a profit before tax of \(£120{,}000\). Tax is charged at 30 % of profit before tax. The company also paid a dividend of \(£8{,}000\) on ordinary shares. During the year the company issued an additional 2,000 ordinary shares at a premium of \(£3\) per share; the issue costs amounted to \(£1{,}500\). The new shares were issued on 1 July. Calculate the earnings per ordinary share (EPS) for the year, after tax and after accounting for the preference dividend, expressed to two decimal places.
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About This Question
This is Gce Model Questions Vol1 2021 Financial Accounting Question 45. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Financial Accounting examination.
Difficulty level: Hard .
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