The note (i) of this question looks very similar to the note (v) of J'13/2 Atlas. However, when i attempt it the same way, i don't get the right answer.
1 for 5 RI @ .75c
wkgs:
SC SP
@ Y end ($) (Per TB) 45000 5000
New issue (1/6*45000/2*0.5) (7500) (3250) (13000*.25)
@ Start 37500 1750
Why?
Ask the Tutor ACCA FR
J'12/2 Fresco
You have assumed that the new issue has been accounted for and is therefore included within the $45,000 share capital value.
Ask yourself "How has this value of $13,500 found its way into the credit side of the Suspense account?"
The answer is "We didn't know how to reflect the share issue, but we knew we had to Debit Cash"
The Suspense account is there because we HAVEN'T credited the share capitala account
OK? or do you need me to go further?
So it was calculated but it was not included in the sc @ end as it was in the suspense a/c. Therefore we need to calc the new issue using the 90000 shr to know the split between new shr issue n sp which actually totals to $13500..
Yes.
It was a 1 for 5 @75 cents
That's 18,000 shares issued each face valued at 50 cents = $9,000 credit share capital and the share premium is credited with 18,000 x (75c - 50c) = $4,500
Thanks!
You're welcome
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