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Refer to p2 lecture notes pages 6, 213 and 214, question and answer on Ausra and Danute. I don’t understand how the group’s equity shares become $120,000 as against $100,000 which is also applied in the dividend payable by Ausra.
Was there not a rights (or bonus, I forget!) issue?
Maybe a 1 for 5?
If not, post again and I’ll dig out a copy of the question. It’s a bit awkward answering these from an iPad!
Thank you sir for pointing out. I suppose the Calculation is thus: 75% of Danute 50c Shares (40,000) = 30,000 50c shares devided by 3 = 10,000 50c shares issued which is equivalent to 20,000 $1 equity shares.
Is this correct?
I’m not sure how you take the giant leap that says “10,000 50c shares is the equivalent of 20,000 $1 shares”
That seems illogical to me.
Do you want to look at it again and see if that really is what you wanted to say?
Sorry, that is a costly statement. The deduction by me is not realistic.
I still can not deduce how the additional 20,000 shares came about.
Because we issued them as part of the purchase / acquisition cost of acquiring Danute
Look at the F7 (yes, F7) mini exercises towards the end of the free downloadable course notes on this site. I think, from memory, that exercise 10 in those mini exercises has something like 14 different past F7 acquisition quickie questions.
Practice those until you can deal with a similar situation without any thought – practice until it becomes automatic
Ok?
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