An extract of Willow Co’s trial balance as at 30 June 20X1 is shown below.
Debit Credit
$000 $000
Equity shares, $1 72000
Share premium 13000
Revaluation surplus at 1 July 20X0 10000
Retained earnings at 1 July 20X0 12920
Dividends paid 3000
During the year ended 30 June 20X1, Willow Co made a ‘1 for 5’ bonus issue.
Complete the following table to identify the accounting entries required to record the
bonus issue.
what will the double entries be for this issue
can u plz explain why does the mark scheme say (72000 x 1/6)
when it should be (72000 x 1/5)
Ask the Tutor ACCA FA
willow CO limited company
1y ago#1It is because there are 72,000 shares at the end of the year. The rights issue was during the year and so the 72,000 shares included the rights issue. For every 5 shares that there were before the issue, they issued 1 more and so there were 6 shares in total after the rights issue (of which 1 was the rights).
So 1/6 of the 72,000 were because of the rights.
ohhh ok got it thnku sooo much
1y ago#3You are welcome :-)
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