mock exam

If the bonus issue is financed by capitalising the general reserve, then there's no movement on the share premium account, correct After the bonus issue, there is $700,000 nominal value of shares in issue The closing value is $960,000 and there is a movement on share premium of $115,000 So $260,000 worth of shares have been issued at a premium of $115,000 BUT ........ even though you haven't told me what the nominal value of a share is (and you should have done!) I can see that the nominal value per share is 25 cents That means that the NUMBER of new shares issued at full market price is 1,040,000 and the value received was (260 + 115) $375,000 and therefore a premium of 14.375 cents per 25 cent share OK?

hi mike, but 375/ 1040=0.36 cent per share? the premium should be 0.11? so that is why I am confused

Ok, whose mock exam is this - and please don't say it's one of ours! This looks suspiciously like a misprint in the closing share capital figure By working backwards, it's my belief that the closing share capital value should be $900,000 and not $960,000 as per your post Check that out and see if you can agree ..... ..... and let me know please if it's one of our questions

hi, mike , yes, it is one on the questions in mock exam .

Hi, ok, instructions have gone to admin asking for 960 closing share capital to be amended to 900 Thanks for pointing out the error