4/B

B. The balance sheet of Fahmy plc. shows the following information in its assets and liability and equity section: Assets S Non-current assets 400,000 B291 / THE-Final7 of 12020-2021/Summer Current assets Total Assets 100,000 500,000 100,000 250,000 Liabilities and Equity Total Liabilities Equity: Share capital: ordinary shares of $ 2.5 each Reserves: Share premium Reserves : Retained earnings Total Liabilities and Equity 100,000 50,000 500,000 Fahmy Plc. Needs to raise more cash and decided to make 1 for 4 rights issue, fully paid in cash at a price $5 per share. Required: Show by using detailed workings the effect on the balance sheet accounts of the rights issue. (10 Marks)