The Equity accounts of CC Ltd are shown below: Ordinary Share Capital (R4 par value) R 400 000 Share Premium R 50 000 Retained Profits R 150 000 Total Shareholders Equity R 600 000 Cane Ltd shares sell for R 10 per share, and a 10% scrip dividend is declared.

Required:

2.1.1 Calculate the number of new shares that will be distributed. (8)

2.1.2 Redraft the Equity accounts section of the balance sheet. (8)

2.1.3 Discuss whether this has been a wise decision? Explain. (2)