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

Preparation of financial statements — practice question

A company carries out a fully subscribed rights issue of 100000 ordinary shares of $1 each at $1.20 per share. At that time, the market value of one share was $1.30. Half of the rights issue proceeds were used to repay a long-term loan. By what amount did the company’s capital employed rise?

  • A$60000
  • B$65000
  • C$120000
  • D$130000

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