A shareholder of the company in Example 4.3 owned 100 shares before the bonus issue.

How will things change for this shareholder as regards the number of shares owned and the value of the shareholding?

Example 4.3

The summary statement of financial position of a company at a particular point in time is as follows:

The directors decide that the company will issue existing shareholders with one new share for every share currently owned by each shareholder. The statement of financial position immediately following this will appear as follows:

Transcribed Image Text:

Statement of financial position 128,000 Net assets (various assets less liabilities) Equity Share capital 50,000 shares of 1 each Reserves Total equity 50,000 78,000 128,000