Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

A company’s equity comprised the following items: ordinary shares of $1 each totalling $1500000, as well as a share premium account of $600000. One share had a market price of $1.50. The company carried out a fully subscribed rights issue of 500000 ordinary shares at $1.20 per share. What was the balance of the ordinary share capital account and the share premium account after the issue?

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