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

Preparation of financial statements — practice question

At 1 January, X Limited’s share capital consisted of $100\,000$ ordinary shares that had been issued at a par value of $\$1$ per share. No share premium account existed. On 1 March, the company carried out a bonus issue of one additional ordinary share for every five ordinary shares already held, using retained earnings. On 1 June, the company carried out a rights issue of one new ordinary share for every four ordinary shares held, at $\$1.50$ each. Every right was accepted. What amount was shown in the share premium account?

  • A$12\,500
  • B$15\,000
  • C$30\,000
  • D$45\,000

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