1 FV of ordinary shares (10,000 x 360)

FV of preference shares (20,000 x 270)

Total

3,600,000
5,400,000
9,000,000

Proceeds allocated to PS (8,000,000 x 54/90)

Less: PV of PS (20,000 x 200)
Share premium on preference

4,800,000
4,000,000
800,000 C

Proceeds from bonds and ordinary issuance

Less: FV of bonds payable
Proceed allocated to ordinary shares
Proceeds allocated to OS with PS (8M x 36/90)
Total
Less: PV (30,000 x 100)
SP on ordinary shares

11,000,000
5,000,000
6,000,000
3,200,000
9,200,000
3,000,000
6,200,000 D

2 Cash (20 x 25,000)

Legal services (40 x 1,000)
Land (60 x 5,000)
Total share premium

500,000
40,000
300,000
840,000 A

3 Proceeds (15,000 x 60)

Less: Cost of treasury shares (15,000 x 50)
Gain and Share premium from treasury shares

900,000
750,000
150,000

Proceeds (5,000 x 45)

Less: Cost of treasury shares
Loss and debit from Share premium from treasury

225,000
250,000
(25,000)

Total Share premium (2M + 150k - 25K)

2,125,000 A

4 PV of treasury shares (1,000 x 50)

Share premium from issue (1,000 x 20)
Total
Less: Cost
Share premium from treasury shares

500,000
200,000
700,000
550,000
150,000 B

5 Share capital before retirement

Less: PV of retired treasury shares
Share capital after retirements
6 Shares issued (100 + 10) x 2
Share outstanding (95 + 1 + 10) x 2
Share capital
Share premium
RE
Treasury shares

2,500,000
250,000
2,250,000 C
220,000
212,000 A
2,000,000
1,000,000
1,500,000
(200,000)

TSHE
Proceeds from issue price of TS (5,000 x 30)
Bal. Of SHE after issuance and retirement

4,300,000
150,000
4,450,000 A

1 RE 1/1
Small stock dividend
Net loss
RE 12/31

5,000,000
(1,000,000)
(2,500,000)
1,500,000 D

2 RE 1/1
100% Stock dividend (200,000 - 20,000) x 5
Cash dividend (180,000 + 180,000) x 10
Net income
Total 12/31 RE
Appropriation for treasury shares
RE Unappropriated 12/31

5,000,000
(900,000)
(3,600,000)
3,000,000
3,500,000
(400,000)
3,100,000 A

3 RE 1/1
FV of property dividend on 7/1
Adjustment to FV of property dividend on BS date
Net income
RE 12/31

5,000,000
(1,500,000)
(300,000)
3,000,000
6,200,000 B

Inventory at LCNRV

1,200,000 A

FV of asset and CA of Dividend Payable

Less: CA of Inventory
Gain on distribution

2,000,000
1,200,000
800,000 C

4 Cash Dividend (10 x 80% x 500K)

Property Dividend (10 x 20% x 600k)
Dividend Payable
FV of property dividend (10 x 700,000)
Less: CA
Gain on distribution
5 Total dividend declared
Less: Balance of RE
Liquidating Dividend Debited to "CAPITAL LIQUIDATED"
6 RE 1/1/16 (7.5M - 3M)
Adj. For change in AP and Error (500 - 1,500) x 70%)
Adjusted beginning balance
NI (5M x 70%)
Dividends
RE 12/31
7 Appropriation for treasury shares
Appropriation for expansion
Total appropriated RE

4,000,000
1,200,000
5,200,000 B
7,000,000
4,500,000
2,500,000 B
4,000,000
3,000,000
1,000,000 A
4,500,000
(700,000)
3,800,000
3,500,000
(2,000,000)
5,300,000 B
1,000,000
2,000,000
3,000,000 A

1 Total number of share options

50,000

2016 Compensation expense

500,000

2017 Compensation expense ((500 - 30 - 30)*100) / 3 * 2 - 500,000

380,000

2018 Compensation expense (500 - 30 - 20)* 100 - (500,000 + 300,000)

470,000

Issue price of Shares at option price (45,000 x 120)

Share options outstanding balance
Total
Less: PV of shares
Share premium

5,400,000
1,350,000
6,750,000
4,500,000
2,250,000

2 2016 Compensation expense

2017 Compensation expense
2018 Compensation expense (SQUEEZED)
Total

1,500,000
1,300,000
3,200,000
6,000,000

2016 Compensation expense

2017 Compensation expense
2018 Compensation expense (SQUEEZED)
Payment made

1,500,000
1,300,000
2,200,000
5,000,000

3
2016 (60,000 x (62 - 60) / 3
2017 (60,000 x (66 - 60) / 3 x 2
2018 (60,000 x (75 - 60)
2019 (60,000 x (85 - 60)
4
2016 (50,000 x (124 - 100) / 3
2017 (50,000 x (151 - 100) / 3 x 2
2018 (50,000 x (151 - 100)

Cumulative

Compensation Expense

240,000
900,000
1,500,000

40,000
200,000
660,000
600,000

Cumulative

Compensation Expense

1,700,000
2,550,000

400,000
1,300,000
850,000

Liability for SAR 12/31/17

Less:Adjusted liability on 12/31/18 (120 - 100) x 50,000
Gain on reversal of SAR
5 FV of Share Based Payment (Share alternative) (25,000 x 48)
Less: FV of Liability Component (Cash alternative) (20,000 x 51)
FV of EQUITY component of SBP
2016
FV of liability component (54 x 20,000) / 3
FV of equity component (180,000 / 3 years)
Total compensation expense

1,700,000
1,000,000
700,000
1,200,000
1,020,000
180,000

360,000
60,000
420,000

2017
FV of liability component (66 x 20,000) / 3 x 2 = 880,000 - 360,000
FV of equity component
Total compensation expense

520,000
60,000
580,000

2018
FV of liability component (65 x 20,000) - (360,000 + 520,000)
FV of equity component
Total compensation expense

420,000
60,000
480,000

Total compensations payable as consideration for shares

Total equity component
Total amount
Less: PV of shares (25,000 x 30)
Share premium from issuance if settled in shares

1,300,000
180,000
1,480,000
750,000
730,000

If the SBP is settled in cash, the equity component (SOO acct) is closed to Share premium
6 FV of Share Based Payment (Cash price)
Less: FV of Liability Component (Cash alternative) (40,000 x 110)
FV of EQUITY component of SBP

5,000,000
4,400,000
600,000

Settlement price (130 x 40,000)

Less: 1/1/16 Liability
Increase in liability as expense

5,200,000
4,400,000
800,000

Liability component (accts payable) as consideration

Equity componentto be transferred to SP

4,400,000
600,000
5,000,000
2,500,000
2,500,000

Less: PV (50,000 x 50)

Share premium

1 Liquidation value
Preferred dividends
Preference shareholders' equity
Preference shares outstanding
BV per preference share

3,450,000
300,000
3,750,000
30,000
125 A

2 Liquidation value
Preferred dividends
Preference shareholders' equity

3,300,000
1,500,000
4,800,000

TSHE
Less: PSHE
Ordinary shareholders' equity
Ordinary shares outstanding
BV per share

12,000,000
4,800,000
7,200,000
50,000
144 A

3 TSHE
Ordinary shares outstanding
BV per share
4 Dividends in arears
Current year dividends
Total
Less: Dividends paid
Balance to be DISCLOSED
6 Total declaration
Preferred dividend (5m x 10%)
Preferred dividend (10M x 12% x 5)
Ordinary dividend (10M x 12%)
Balance for participation

9,800,000
80,000
122.50 A
300,000
300,000
600,000
200,000
400,000 D
9,500,000
(500,000)
(6,000,000)
(1,200,000)
1,800,000

Balance to ordinary (1.8M x 10/20)

Balance to preference (1.8M x 10/20)

900,000
900,000

Total dividend to 12% PS (6M + 900K)

PD to 10% PS
Total dividend to OS

6,900,000 B
500,000 C
2,100,000 A

7 Deficit
Adjustment to inventory
Adjustment to Plant assets
Adjustment to accounts payable
Adjusted deficit
Share premium
Contribution from shareholders
Recapitalization of shares

(2,000,000)
(500,000)
(1,000,000)
(300,000)
3,800,000
500,000
1,500,000
2,500,000

Total share premium

Balace of share premium after QRO (4.5M - 3.8M)
Share capital
Share premium
RE
SHE

4,500,000
700,000
2,500,000
700,000
0
3,200,000 A

1 Net income
Less: Preferred dividend requirement on cumulative pref shares
Net income to ordinary shareholders
Divide by
Basic earnings per share
2
Beginning balance
April 1: Issuance
May 1: 2 for 1 share split
June 30: Acquisition
July 30: 20% Bonus issue
December 31: 3 for share split
Ending balance
3 Total fair value of shares (60,000 x 160)
Proceeds from exercise (60,000/5) x 100
Total amount
Divide by total number of shares
FV of shares ex-right
Fair value of shares
Divide by FV of shares ex-right
Adjustment factor
1/1 to 3/31 (60,000 x 106.67 % x 3/12)
4/1 to 12/31 (72,000 x 9/12)
Weighted Average number of shares
Net income
Divide by average number of shares
Basic EPS
4 Profit before taxes
Less: Income tax expense
Net income
Divide by ordinary shares outstanding (1M / P5 PV)
BEPS

5 Net income
Less: Preferred dividend (5 x 20,000)
Net income to ordinary shareholders
Divide by
Basic earnings per share
Proceeds from exercise of share options (60,000 x 15)

Assumed treasury shares (900,000 / 20)

Incremental ordinary shares from share options (60k - 45k)
Convertible pref. Shares
Convertible bonds
Share options
Total potential ordinary shares

Effect or adjustment to net income of Incremental OS

Dividends on preference shares
Interest on bonds payable
Less: Taxes
Interest net of taxes
Incremental EPS Computation (Effect on NI divided by Incremetal shares)
Share options ( Zero divided by 15,000)
Convertible preference shares (100,000 / 40,000)
Convertible bonds payable (140,000 / 30,000)
Net income
Divide by Ordinary shares and Incremental shares from share options
Diluted EPS
Adjsuted net income
Divide by Ordinary shares and Incremental shares from SO and CPS
Diluted EPS
6 Proceeds from exercise of put options
Assumed treasury shares
Incremental ordinary shares
7 Net Loss
Less: Preference dividends
Net loss to ordinary shares
Divide by
Basic and Diluted loss per share

The Diluted Loss per Share is also 64 because the assumed conversion of the preference shares will reduce the loss pe
LPS if converted ( 3M / (50k + 20k)

4,000,000
300,000
3,700,000
50,000
74 A

100,000
30,000
130,000
(10,000)
50,000
600,000
900,000

Adjustment
x 2 x 1.20 x 3
x 2 x 1.20 x 3

Adjusted Number Months Outstanding

720,000
12 mo / 12 mo
216,000
9 mo / 12 mo

x 1.20 x 3

(36,000)

900,000
9,600,000
1,200,000
10,800,000
72,000
150
160
150
106.67%
16,000
54,000
70,000
4,000,000
70,000
57.14 A
6,000,000
1,800,000
4,200,000
200,000
21 C

650,000
100,000
550,000
110,000
5.00 A
900,000

6 mo / 12 mo

Average
720,000
162,000
(18,000)

864,000 B

45,000
15,000
40,000
30,000
15,000
85,000 C

100,000
200,000
60,000
140,000

0 Most Dilutive
2.50 Second
4.67 Least Dilutive
550,000
125,000
4.40
650,000
165,000
3.94 D
7,000,000
25,000
5,000 C
(3,000,000)
(200,000)
(3,200,000)
50,000
(64) B and #2 D

nce shares will reduce the loss per share to 42.86

(42.86)