Q. No 3 (Bonus Shares) ABC SAOG has in issue 10 million, RO 1 equity share. The company decided to make a bonus issue in the ratio of 2 for 10 shares held. Prior to issue of bonus the company had following balance in its reserves and surplus: Share premium RO 1,000,000, General Reserve RO 1,000,000, Retained earnings RO 5 million Revaluation surplus RO 2,000,000. The company has to use in priority share premium. 50% of General reserve and 10% of Retained earnings can be used for bonus shares.

Journalize the entries and show its working and effect on items of Statement of Financial Position assuming that the company had PPE RO 12 Million and Net CA RO 7 Million.