Accounting 9706 · AS & A Level · The accounting system

The accounting system — practice question

A company’s issued share capital stood at $400000$, consisting of ordinary shares of $0.50$ each that were fully paid. The transactions below then occurred. 1 A bonus shares issue was made at the rate of one ordinary share for every four ordinary shares already held. 2 Afterwards, a rights issue of ordinary shares was made at the rate of one new share for every two already held, at a premium of $0.15$ per share. The issue was fully subscribed. What amount will be added to the company’s bank account?

  • A$125000$
  • B$162500$
  • C$250000$
  • D$325000$

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