An extract of Sky High plcs statement of financial position as at 1 October 20x6 is given

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An extract of Sky High plc’s statement of financial position as at 1 October 20x6 is given below: image text in transcribed

On 1 January 20x7, the company issued 1 right share for every 5 in issue for £4 each when the market price was £5.

a Show how the rights issue should be accounted for in the statement of financial position.

b Calculate the theoretical share price of Sky High plc after the rights issue. Explain why in reality the share price may differ from the theoretical price.

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Accounting Understanding And Practice

ISBN: 9780077139131

4th Edition

Authors: Robert Perks

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Question Posted: May 14, 2024 06:02 AM

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An extract of Sky High plcs statement of financial position as at 1 October 20x6 is given

Question:

000 Ordinary share capital @ 1 each 1,000 Revaluation reserve 2,500 Retained profits 3,200 6,700

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Accounting Understanding And Practice

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