B. The balance sheet of Fahmy plc. shows the following information in its assets and liability and equity section:

Assets

$

Non-current assets

250,000

Current assets

100,000

Total Assets

350,000

Liabilities and Equity

Total Liabilities

100,000

Equity:

Share capital : ordinary shares of $ 5 each

125,000

Reserves : Share premium

25,000

Reserves : Retained earnings

100,000

Total Liabilities and Equity

350,000

Fahmy Plc. Needs to raise more cash and decided to make 1 for 2 rights issue, fully paid in cash at a price $7 per share.

Required:

Show by using detailed workings the effect on the balance sheet accounts of the rights issue.