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Sir:
Question #2
At 31 December 2004 a company’s capital structure was as follows:Ordinary share capital. 125,000
500,000 shares of .25c each
Share premium account. 100,000In the year ended 31 December 2005 the company made a rights issue of 1 share for every 2 held at $1 per share and this was taken up in full. Later in the year the company made. Bonus issue if 1 share for every 5 held, USING THE SHARE PREMIUM ACCOUNT FOR THE PURPOSE.
What was the capital structure at December 31, 2005.
My calculations:
# shares. Share capital. Share premium
500,000. 125,000. 100,000
250,000. X .25. 62,500. 187,500. (250,000 @.75)
Where do I go from here. And, given the answer, I must have done something wrong.Thanks
Also question 5:
At JUNE 30 2005 the capital reserves of smith were:Ordinary shares of $1 each. 100
Share premium 80
During the year. Ended June 30, 2006
1 September 2005. A bonus issue of one ordinary share for every two
held USING THE SHARE PREMIUM ACCOUNT.
1 January 2006. A fully subscribed rights issue of two ordinary shares
For every five held at that date at $1.50 per share.What would be the balance on each account be at 30 June 2006?
My workings:
# shares. Share capital. Share premium
100. 100. 80
50. ? ?
60. 60. 30Thanks
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