Question

Starfruit. company in Hong Kong, comprised 5,000,000 fully paid ordinary draft statement com, a listed shares of $1 each and
3, 5% convertible loan stocks with a nominal value of $5,000,000 were issued. Each S1,000 loan stock could be convertible to
(b) Determine the deferred tax liability or asset for (1). (2) and (3) as at 31 December 2013.
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Answer #1

(Note:- Since it is not mention as to which question need to be answered, so as per HomeworkLib policy first question appearing has been answered)

Basic EPS = Net profit distributable to Equity shareholders / Weighted average No of Equity share
EPS for the year ended 31st December,2014 = 2100000 / (5000000*1.07*6/12+6000000*6/12)
= $ 0.37 per Share
Workings:

(Fair Value of all outstanding shares immediately prior to exercise of rights + Total amount received from exercise) /

(No of Shares outstanding prior to issue + Number of shares issued in the exercise)

1 Computation of Ex theoretical Ex-Rights fair value per share
= 28000000 / 6000000    
= $ 4.67
2 Computation of adjustment Factor
= (Fair value per share prior to exercise rights) / (Theoretical ex-rights value per share)
= 5 / 4.67
= 1.07
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