The summarised Balance Sheet of Bonarite Ltd at 30 June 2004 was as follows. On 1 July
Question:
The summarised Balance Sheet of Bonarite Ltd at 30 June 2004 was as follows.
On 1 July 2004, before any other transactions had taken place, the company made a bonus issue of shares on the basis of four new shares for every five already held. The directors wished to leave the reserves in the most flexible form.
Required
(a) Show how Bonarite Ltd's Balance Sheet will appear at 1 July 2004 immediately after the issue of the bonus shares. Following the issue of the bonus shares, the company made a rights issue of one new share for every three shares already held. The shares were offered at $1.25 per share and all the shares were taken up.
(b) Show how Bonarite Ltd's Balance Sheet will appear immediately after the rights issue has been completed.
Step by Step Answer:
answer a Balance Sheet at 1 July 2004 Immediately After the Bonus Issue of Shares Assets Equity and Liabilities Net Fixed and Current 2000 Share Capit...View the full answer
