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Suggested Solution:

A) For Duck Ltd:

Step 1:
Basic EPS = Profit for the year / Weighted average Number of shares outstanding Basic EPS (Continued

Operations) = Profit from continued operations / Weighted average
Number of shares outstanding

= Rs 2,52,000 / 80,000 = Rs 3.15
Basic Loss per share (Discontinued operations) = Loss from discontinued operations / Weighted average

Number of shares outstanding
= Rs (4,20,000) / 80,000 = (Rs 5.25)

Overall Basic Loss per share = (Rs 1,68,000) / 80,000 = Rs (2.10) (i)

Step 2: Calculation of Diluted EPS
Diluted EPS =Profit for the year / Adjusted Weighted average Number of shares outstanding EPS (Continued

Operations) = Profit from continued operations / Adjusted Weighted average Number of shares outstanding

= Rs 2,52,000 / 96,000 = Rs 2.625
Loss per share (Discontinued operations) = Loss from discontinued operations / Adjusted weighted average

number of shares outstanding
= Rs (4,20,000) / 96,000 = (Rs 4.375)

Overall Diluted Loss per share = Rs 1,68,000 / 96,000 = Rs (1.75) (ii)
Reporting Status:

The income from continuing operations is the control number, there is a dilution in basic EPS for income from
continuing operations (reduction of EPS from Rs 3.15 to Rs 2.625). Therefore, even though there is an anti-

dilution [Loss per share reduced from Rs 2.10 (i) to Rs 1.75 (ii) above], diluted loss per share of Rs 1.75 is
reported.

B) For Swan Ltd:

Treatment of potential shares:
In case of loss from continuing operations, the potential shares are excluded since including those shares would

result into anti-dilution effect on the control number (loss from continuing operations).
Step 1:

Basic EPS = Profit for the year / Weighted average Number of shares outstanding Basic EPS (Continued
Operations) = Profit from continued operations / Weighted average

Number of shares outstanding
= Rs (1,80,000) / 96,000 = Rs (1.875)

Basic Loss per share (Discontinued operations) = Loss from discontinued operations / Weighted average
Number of shares outstanding
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