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At 30 September 20X2 the trial balance of Cavern includes the following balances:
Equity shares of 20c each 50,000,000
Share premium 15,000,000
Cavern has accounted for a fully-subscribed rights issue of equity shares made on 1 April 20X2 of one new share for every four in issue at 42 cents each. This was the only share issue made during the year.
What were the balances on the share capital and share premium accounts at 30 September 20X1?The examiner is multiplying 50,000,000 shares with the 0.20 for calculating the equity shares but if its a 1 for 4 rights issue then how he calculated that 50m figure?
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