Cash Flows

293 Extracts from the statements of financial position of Nedburg Co are as follows. Statements of financial position as at 30 September 20X2 20X1 $m $m Equity Ordinary shares of $0.50 each 750 500 Share premium 350 100 Retained earnings 1,980 1,740 On 1 October 20X1, a bonus issue of one new share for every ten held was made, financed from share premium. This was followed by a further issue for cash. The statement of profit or loss of Nedburg Co shows a profit for the year of $480,000. What amount will appear under 'cash flows from financing activities' in the statement of cash flows of Nedburg Co for the year ended 30 September 20X2 in respect of share issues? I didnt quite understand the solution to this question, particularly on the issue for cash after the bonus issue, in the suggested solution they are saying the issue for cash is $400m but i am finding $500, in the solution they are accounting for bonus issue as 100, could you assist please? Solution (the dividend part i understand, but how they are solution says the cash issue is $400m, i dont get it) $m Issue of shares Share capital and premium b/f (500 + 100) 600 Bonus issue (500/0.50 × 1/10) 100 Cash received (?) 400 Share capital and premium c/f (750 + 350) 1,100 Dividends paid Retained earnings b/f 1,740 Profit for the year 480 Dividend paid (?) (240) Retained earnings c/f 1,980 Cash inflow from financing activities (400-240) 160