Solution

Preference dividend for the year 2017-18 @ 10% pa $ 20,000. Excess value repaid over carrying value $ 30,000 Total preference dividend $ 50,000.

In this case, since the preference shares are being redeemed at a premium, the excess value over the carrying value is considered as a part of the total preference dividend payable. Therefore, the total preference dividend payable for the year 2017-18 is $50,000, which is the sum of the preference dividend of $20,000 and the excess value of $30,000. This amount would be added back to the net income to calculate the earnings available to common shareholders for the calculation of basic EPS.