Exercise 1

Fair Value of Convertible Bonds 10,000,000 JournalLess: Fair Value of Liability Component 10,000,000 0.48519 4,851,939 Cash 10,000,000

600,000 6.86408 4,118,449 Bonds Payable 8,970,388Equity Component 1,029,612 Share Premium - Conversion Equity 1,029,612Converted at maturity date Repurchased at January 1 20X2Share Premium - Conversion Equity 1,029,612 FV Liability Component 10,750,000Bonds Payable 10,000,000 CA Liability Component 9,121,404 Share Capital - Ordinary 1,000,000 Loss on repurchase 1,628,596 Share Premium - Ordinary 10,029,612Converted at January 1 20X2 FV Convertible Bonds 11,500,000Share Premium - Conversion Equity 1,029,612 FV Liability Component 10,750,000Bonds Payable 9,121,404.47 FV of Equity 750,000 Share Capital - Ordinary 1,000,000 Share Premium - Ordinary 9,151,017 Share Premium - Conversion 750,000

Bonds Payable 9,121,404Loss on Repurchase 1,628,596 Cash 11,500,000

Issuance RepurchaseCash 7,500,000 Share Capital - Preference 5,000,000 Share Capital - Preference 5,000,000 Share Premium - Conversion 2,500,000 Share Premium - Conversion Equity 2,500,000 Retained Earning 2,500,000Conversion Cash 10,000,000Share Capital - Preference 5,000,000Share Premium - Conversion Equity 2,500,000 Share Capital - Ordinary 2,000,000 Share Premium - Ordinary 5,500,000

Fair Value of Bonds + Warrant 12,250,000 JournalLess: Fair Value of Liability Component 12,000,000 0.56743 6,809,122 Cash 12,250,000

1,200,000 3.60478 4,325,731 Bonds Payable 11,134,854Equity Component 1,115,146 Share Premium - Share Warrants 1,115,146

Convertible Bonds

Preference Shares

Share Warrants

ExerciseCash 600,000Share Premium - Share Warrants 557,573 >kalo sisanya ga diexercise di transfer ke share premium ordinary Share Capital - Ordinary 300000 Share Premium - Ordinary 857,573

Grant Date - January 4 20X2 Exercise Date(no entry) Cash 5,625,00031 December 20X2, 20X3 & 20X4 Share Premium - Share Option 11,250,000Compensation Expense 5,000,000 Share Capital - Ordinary 5,000,000 Share Premium - Share Option 5,000,000 Share Premium - Ordinary 11,875,000

Expiration DateShare Premium - Share Option 3,750,000 Share Premium - Expired 3,750,000

Grant Date - June 31 20X2 ForfeitedUnearned Compensation 6,600,000 Share Capital - Ordinary 3,000,000 Share Capital - Ordinary 3,000,000 Share Premium - Ordinary 3,600,000 Share Premium - Ordinary 3,600,000 Compensation Expense 1,100,000December 31 20X2 Unearned Compensation 5,500,000Compensation Expense 1,100,000 Unearned Compensation 1,100,000

Dates Outstanding Shares Out Restatement Fraction Weighted SharesJan 1 - Feb 28 30000 2 1/6 10,000Feb 29 - 30 April 50000 2 1/6 16,667May 1 - July 30 45000 2 1/4 22,500July 31 - 30 Sept 55000 2 1/6 18,3331 Oct - Dec 31 110000 1/4 27,500Weighted Average Shares Outstanding 95,000

Earning Per Share

Basic EPS 15,000,000 - (400,000 x 75%) 153.684 Diluted EPS 115.2195000

Weighted Average Shares Outstanding

Share Option Plans

Restricted Shares

Diluted Effect720,000

10,000400,000

2,000-

22,500

Convertible Bonds 72

Convertible Preference 200

Share Warrants 0

Exercise 2 Homework 2Preference shares dividend 106250 a. Weighted average shares outstandingBasic EPS Date Shares Outstading Fraction average shares

1 jan-1 Apr 220,000 3/12 55,000Dilutive Effect 1 apr - 1 sept 240,000 5/12 100,000Convertible Bonds 1 sep - 31 des 210,000 4/12 70,000

b. basic EPS900,000 - 140,000

Options 225,0000 Effect

25,000 OptionsProceed from exercise 0 Share issued 100,000 6,000 T/S purchased 75,000 Proceed from exerciseIncremental share outstanding 25,000 Share issued 30,000Diluted EPS T/S purchased 24,000

Incremental share outstanding 6,000Convertible PS

Homework 1 7 x 20,0001/1/2007 No Entry 20,000 x 31/2/2007 No entry Convertible Bonds

12/31/2007 Compensation Expense 650,000 8% x 2,000,000 x 60% Share Premium - Share Options 650,000 40,000

12/31/2008 Compensation Expense 650,000 Diluted EPS Share Premium - Share Options 650,000 996000

1/2/2009 Cash 1,920,000 331000Share Premium - Share Option 1,040,000 Share Capital Ordinary 480,000 Share Premium Ordinary 2,480,000Share Premium - Share Option 260,000 Share Premium - expired 260,000

1.2578

3.378

0

2.33

2.4

3.01

0

1,500,000 - 106,2501,000,000

1,000,000+250,000+25,0001,500000-106,250+210,000+0

1.39375

2500007% x 5,000,000 x 60%

0.84