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Hi Chris
I hope you are well.
https://opentuition.com/acca/fr/presentation-of-financial-statements-example-3-acca-fr/
Regarding your lecture above, this is probably a bit of a silly question but in layman’s terms, what does statement (ii) actually mean?
I’m referring to “200,000 equity shares of $1 were issued during the year at a 25c premium”.
Is this simply a case of 200,000 equity shares being raised at $1 (which would be Share Capital) with an additional 25c premium which we accounted for in the question? I’m trying to understand what this means as simply as possible although assuming I’m right, I’m not sure if it can be explained any more simply. Thanks in advance.
Kind regards
James
Hi James,
Never a silly question. In its simplest terms the 200,000 shares have been issued at $1.25 per share.
They have a par value of $1 each and the premium of 25c gives the total issue price of $1.25. You are then correct in what you say regarding the $1 going to equity share capital and the 25c going to the share premium account.
Thanks
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