hello mike
Can you please help me with the following questions
Question 1
At 30 sep 2002 trial balance include the following balance
Equity shares of 20c each $50 000 000
Share premium 15 000000
X has accounted for a fully subscribed right issue of equity shares made on 1 April 2002 of one new shares for every 4 in issue at 42 cents each
Calculate share capital and share premium balance at 30 sep 2001
ACCA Forums
FREps question
OSC is $50 m
number of shares = $50m/.20 =250m shares
so new issue of 1 for 4 ...i.e 250/4 =62.5m new issue of shares
62.5m @ 20c this goes for equity = $12.5 m and new bal = $62.5 m
62.5m @22c this goes to sh. premium =$13.75m and new bal = 28.75
i hope this helps and i think this should be the workings not sure if its correct :P
No the answer is 40 000 share capital and 4000 share premium
Hi, you're trying to work out the balance on the share capital (SC) and share premium (SP) accounts at the beginning of the year, so the balances on the SC and SP accounts will be less than at the year end, i.e. less than $50m and $15m respectively.
To do this multiply the SC balance at the year end by 20c for the SC rights issue movement and by 22c (42c-20c) for the SP movement:
SC SP
$m $m
Bal. 30 09 X2 50 15
Rights issue:
SC ($50m x 20c) (10)
SP ($50m x 22c) (11)
Bal. 30 Sep X1 40 4
I hope that makes sense.
Thank u very much for the explanation
Sign into reply to this topic.