# MCQ for CA Final FR - Chapter 9 Ind AS 33: Earnings per Share

Sample Multiple Choice Questions (MCQ's) for CA Final - Paper 1 - Financial Reporting - Chapter 9: INDIAN ACCOUNTING STANDARD 33: Earnings per Share :  - For Practice relevant for May/Nov 23 Examinations

Q:1 An entity issues 100,000 ordinary shares of Re 1 each for a consideration of `2.50 per share.
Cash of `1.75 per share was received by the balance sheet date.The partly paid shares are entitled to participate in dividends for the period in proportion to the amount paid.
Calculate number of shares for calculation of Basic EPS.

1. 17000
2. 72000
3. 78000
4. 70000

Answer: 4

Q:2 An entity has two classes of shares in issue:
• 5,000 non-convertible preference shares
• 10,000 ordinary shares

The preference shares are entitled to a fixed dividend of ₹ 5 per share before any dividends are
paid on the ordinary shares. Ordinary dividends are then paid in which the preference
shareholders do not participate. Each preference share then participates in any additional
ordinary dividend above ₹ 2 at a rate of 50% of any additional dividend payable on an ordinary
share
The entity's profit for the year is ₹ 100,000, and dividends of ₹ 2 per share are declared on the ordinary shares
Compute the allocation of earnings for the purpose of calculation of Basic EPS when an entity has ordinary shares & participating equity instruments that are not convertible into ordinary shares
Calculate Dividend per share for preference shares

1. 6.40
2. 6.20
3. 7.20
4. 7.10

Answer: 3

Q:3 An entity issues 100,000 ordinary shares of Re 1 each for a consideration of `2.50 per share. Cash of `1.75 per share was received by the balance sheet date. The partly paid shares are entitled to participate in dividends for the period in proportion to the amount paid.
Calculate number of shares for calculation of Basic EPS.

1. 17000
2. 72000
3. 78000
4. 70000

Answer: 4

Q:4 At 30 June 20X1, the issued share capital of an entity consisted of 1,500,000 ordinary shares of ₹ 1 each. On 1 October 20X1. the entity issued ₹ 1.250,000 of 89% convertible loan stock for cash at par. Each ₹ 100 nominal value of the loan stock may be converted. at any time during the years ended 20X6 to 20X9, into the number of ordinary shares set out below
30 June 20X6: 135 ordinary shares:
30 June 20X7: 130 ordinary shares:
30 June 20X8: 125 ordinary shares, and
30 June 20X9 120 ordinary shares
If the loan stocks are not converted by 20X9, they would be redeemed at par
It is assumed that the witten equity conversion option is accounted for as a derivative liability and marked to market through profit or loss. The change in the options' fair value reported in 20x2 and 20X3 amounted to losses of ₹ 2,500 and ₹ 2,650 respectively. It is assumed that there are no tax consequences arising from these losses.
The profit before interest, fair value movements and taxation for the year ended 30 June 20X2 and 20X3 amounted to ₹ 825.000 and ₹ 895,000 respectively and relate wholly to continuing operations. The rate of tax for both periods is 33%
Calculate Diluted EPS for 20X2

1. 19 paise
2. 20 paise
3. 22 paise
4. 25 paise

Answer: 2

Q:5 1 January                        Shares in issue                    1,000,000
5% Convertible bonds                   ₹ 100,000
(terms of conversion 120 ordinary shares for ₹ 100)
31 March Holders of ₹ 25,000 bonds converted to ordinary shares.
Profit for the year ended 31 December                                ₹ 200,000
Tax rate 30%.
Calculate diluted EPS. Ignore the need to split the convertible bonds into liability and equity elements

1. 0.101
2. 0.118
3. 0.110
4. 0.181

Answer: 4

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