Talbot Pie has in issue 5 000 000 ordinary shares throughout 2017. During 2015 the
company had given senior executives options over 400 000 shares excisable at N$110 at any time after May 2018. None were exercised during 2017. The average fair value of one ordinary share during the period was N$1.60. Talbot Pie made a profit after tax
of N$ 540 000 in 2017.
Sinbad Pie had the same 20 million ordinary shares in issue on both 1 January 2017
and 31 December 2017. On 1 January 2017, the company issued 2 400 000 N$1 units
of 10% convertible loan stock. Each unit of stock is convertible into 8 ordinary shares on
1st January 2025 at the option of the holder. The following is the extract from Sinbad’s
pie statement of profit or loss and other comprehensive income account for the year
ended 31 December, 2017.
Required
Operating profit
Interest payable on 10% convertible loan stock
Profit before tax
Taxation Elenasruiz1101%
Profit after tax
N$ 000
1960
illQl
1 840
(552)
1 288
What is the basic and diluted earnings per share for the year ended 31 December 2017

Mushanga limited purchased a specialised machine on 1 January 2015 for
N$1 0 000 000. Mushanga Limited provides for depreciation on the diminishing
balance method at 20%. The following relates to an error made by Mushanga
Limited
1. It processed depreciation of N$ 2 000 000 in both 2015 and 2016 (2 years) and
N$ 1 200 000 in 2017.
2. The error was picked up in 2017 after the current period’s entries had been
processed.
The income tax is 30% and it has been unchanged for many periods.
The tax authorities allow the annual deduction of 20% of the cost of the asset