Question
Company A presents the following Equity in the Statement of Financial Position on 30/06/2018: Share Capital of 80,000 shares of 1 each and share premium
Company A presents the following Equity in the Statement of Financial Position on 30/06/2018: Share Capital of 80,000 shares of 1 each and share premium of 32,000. On that date, company A decides to obtain funding issuing 1 for 4 ordinary shares with nominal value of 1 and a price of 2. After considering the shares issue, which of the following statements is correct?
a. None of the answers is true.
b. The company decreases cash in 40,000.
c. The company issues 20,000 shares. Share premium increases in 20,000 and share capital increases in the same amount.
d. The company issues 20,000 shares and share premium decreases in 20,000.
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