Which TWO of the following do NOT need to be removed from an entity’s net profit in astatement of profit or loss in order to calculate the earnings figure to be used in the earningsper share calculation?A Redeemable preference share dividendsB Irredeemable preference share dividendsC Profit attributable to the non‐controlling interestD An error in expenses discovered after the financial statements have been authorised forissueE Ordinary dividends10 Tibet acquired a new office building on 1 October 20X4. Its initial carrying amountconsisted of:Particulars $000Land 2,000Building structure 10,000Air conditioning system 4,000Total 16,000The estimated lives of the building structure and air conditioning system are 25 years and 10years respectively. When the air conditioning system is due for replacement, it is estimatedthat the old system will be dismantled and sold for $500,000.Depreciation is timeapportionedwhere appropriate.At what amount will the office building be shown in Tibet’s statement of financial position asat 31 March 20X5?

The question seems to be in two parts.

For the first part, the two items that do not need to be removed from an entity's net profit in a statement of profit or loss in order to calculate the earnings figure to be used in the earnings per share calculation are:

B) Irredeemable preference share dividends C) Profit attributable to the non‐controlling interest

Irredeemable preference share dividends are not removed because they are considered a cost of capital rather than an expense. Profit attributable to the non‐controlling interest is not removed because it represents the share of profit that belongs to minority shareholders, not the entity itself.

For the second part, to calculate the amount at which the office building will be shown in Tibet’s statement of financial position as at 31 March 20X5, we need to calculate the depreciation for the building structure and the air conditioning system.

The building structure depreciates over 25 years, so the annual depreciation is $10,000,000/25 =$400,000. Since we're looking at the value as at 31 March 20X5, which is half a year from the acquisition date, the depreciation for the building structure is $400,000/2 =$200,000.

The air conditioning system depreciates over 10 years, so the annual depreciation is $4,000,000/10 =$400,000. Again, since we're looking at the value half a year from the acquisition date, the depreciation for the air conditioning system is $400,000/2 =$200,000.

So, the total depreciation is $200,000 (building structure) +$200,000 (air conditioning system) = $400,000.

The initial carrying amount of the office building is $16,000,000. Subtracting the total depreciation, the amount at which the office building will be shown in Tibet’s statement of financial position as at 31 March 20X5 is$16,000,000 - $400,000 =$15,600,000.