Craven Ltd Has 10 000 000 Ordinary Shares on Issue

Craven Ltd has 10 000 000 ordinary shares on issue at the beginning of the year,1 July 2013.These shares were issued at $0.50 each and have a current market value of $3.00.On 1 November 2013,Craven Ltd bought back 1 000 000 ordinary shares originally issued at $0.50 for $1.90 each.On 1 February 2014,1 500 000 shares were issued fully paid up at the current market value of these shares.Also during the period,500 000 partly paid-up ordinary shares were issued.They were issued on 1 April 2014 at an issue price of $2.90.These shares were partly paid to $1.80.The partly paid shares are permitted proportionate rights to vote and receive dividends based on the relationship between the amount paid up and the issue price. Craven Ltd has 3 000 000,$1.00 preference shares that provide cumulative dividends at a rate of 8%.
For the year ended 30 June 2014,the net income after tax was $20 000 000.
What are the basic earnings per share for Craven Ltd for the year ended 30 June 2014?

A) $1.99
B) $2.00
C) $1.96
D) $1.53

Correct Answer:

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