1a)

A company has 50,000,000 shares at 10p each nominal value. It makes a 1 for 5 bonus issue from its retained profits, which was 2,000,000 before the issue.

Fill out the table below to reflect the accounting of the issue.

Pre issue Issue Post issue

Share capital 5,000,000

Retained profits 2,000,000

Total 7,000,000

1b.)

A company has 50,000,000 shares at 10p each nominal value. It makes a 1 for 5 rights issue at 15p per share.

Fill out the table below to reflect the accounting of the issue

Pre issue Issue Post issue

Share capital 5,000,000

Share premium

Retained profits 2,000,000

Total 7,000,000

Bank