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accounting level 3 question.

Forums › Other Accountancy Qualifications Forums › accounting level 3 question.

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  • June 10, 2020 at 12:13 pm #573364
    zobia10
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    Net assets 900,000 Ordinary share capital 400,000
    (400,000 shares of £1 each fully paid)
    Share Premium 100,000
    Revaluation reserve 200,000
    Revenue reserves 200,000
    900,000 900,000

    The directors of the company have decided to make a bonus issue on a one-for-two basis, followed immediately by a rights issue on a one-for-four basis, at a premium of 60p.
    You are required to prepare a balance sheet after the above share issues have taken place and to explain the changes that have occurred in the reserves of the company. Assume the company wishes to retain the maximum dividend payment potential.

    I get the one for two and one for four, but not sure where to apply this to?

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