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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
900,000 900,000The 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 cant understand the meaning of
one-for-one
one-for-two
one for-four
one-for-five&
(400,000 shares of £1 reach fully paid)
please help me solve this question and make me understand as well
You need to watch the free lecture on this (it is part of the lecture on limited companies) because I cannot type out the whole lecture here.
1 for 1 means that they issue 1 new share for every 1 already held (so if (for example) there are currently 100,000 shares then they will issue another 100,000 shares).
1 for 2 means they they issue 1 new share for every 2 already held (so if there are currently 100,000 shares they will issue an extra 1/2 x 100,000 = 50,000 new shares)
and so on..!
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