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

Preparation of financial statements — practice question

A company supplies the following details about its equity. $150000$ shares $1$ each: $150000$ share premium $75000$ general reserve $125000$ retained earnings $25000$ The directors plan to issue bonus shares on the basis of one $1$ share for every three already held. After that, the directors plan to carry out a rights issue on the basis of one new $1$ share for every four shares held, with a premium of $0.20$ per share. What will be the company’s total equity after the share issues?

  • A$425000$
  • B$435000$
  • C$475000$
  • D$485000$

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