Illustrative questions 1 The chief accountant of Corchester Ltd had prepared the following bak at 1 July 1994. £000 £000 Fixed assets Freehold property 100 Other fixed assets 480- 580 Current assets (including bank) 440 Less current liabilities 200 240 Y 820 Financed by Issued and paid up share capital 400,000 ordinary shares of £1 each 400 150,000 8% redeemable preference shares of £1 each 150 550 Reserves Capital redemption reserve 100 Shore premium account 50 General reserve 45 Profit and loss account 75 270 820 (20 serve The directors had decided to carry out the following transactions du August 1994. (1) 8 July 1994. A rights issue of one ordinary share for every four he at £1.20 per share. All shareholders took up their rights. (2) 1 August 1994. A bonus issue was made of one ordinary share held, based on the revised ordinary share capital. This was carried equal amounts-from the revenue reserves. (3) 5 August 1994. 40,000 preference shares were redeemed at a p per share. This was achieved out of profits with the exception of which was covered by the share premium account. (4) 15 August 1994. The freehold property was revalued at £130/ (5) 19 August 1994. Fixed assets costing £10,000 were purchase Required (a) A balance sheet as at 19. August 1994 after the completion of indicated above. (b) Describe the features of: (i) a rights issue of shares; (ii) a bonus issue of shares.
Illustrative questions 1 The chief accountant of Corchester Ltd had prepared the following bak at 1 July 1994. £000 £000 Fixed assets Freehold property 100 Other fixed assets 480- 580 Current assets (including bank) 440 Less current liabilities 200 240 Y 820 Financed by Issued and paid up share capital 400,000 ordinary shares of £1 each 400 150,000 8% redeemable preference shares of £1 each 150 550 Reserves Capital redemption reserve 100 Shore premium account 50 General reserve 45 Profit and loss account 75 270 820 (20 serve The directors had decided to carry out the following transactions du August 1994. (1) 8 July 1994. A rights issue of one ordinary share for every four he at £1.20 per share. All shareholders took up their rights. (2) 1 August 1994. A bonus issue was made of one ordinary share held, based on the revised ordinary share capital. This was carried equal amounts-from the revenue reserves. (3) 5 August 1994. 40,000 preference shares were redeemed at a p per share. This was achieved out of profits with the exception of which was covered by the share premium account. (4) 15 August 1994. The freehold property was revalued at £130/ (5) 19 August 1994. Fixed assets costing £10,000 were purchase Required (a) A balance sheet as at 19. August 1994 after the completion of indicated above. (b) Describe the features of: (i) a rights issue of shares; (ii) a bonus issue of shares.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Illustrative questions
1 The chief accountant of Corchester Ltd had prepared the following bak
at 1 July 1994.
£000
£000
Fixed assets
Freehold property
100
Other fixed assets
480-
580
Current assets (including bank)
440
Less current liabilities
200
240
Y
820
Financed by
Issued and paid up share capital
400,000 ordinary shares of £1 each
400
150,000 8% redeemable preference
shares of £1 each
150
550
Reserves
Capital redemption reserve
100
Shore premium account
50
General reserve
45
Profit and loss account
75
270
820
(20
serve
The directors had decided to carry out the following transactions du
August 1994.
(1) 8 July 1994. A rights issue of one ordinary share for every four he
at £1.20 per share. All shareholders took up their rights.
(2) 1 August 1994. A bonus issue was made of one ordinary share
held, based on the revised ordinary share capital. This was carried
equal amounts-from the revenue reserves.
(3) 5 August 1994. 40,000 preference shares were redeemed at a p
per share. This was achieved out of profits with the exception of
which was covered by the share premium account.
(4) 15 August 1994. The freehold property was revalued at £130/
(5) 19 August 1994. Fixed assets costing £10,000 were purchase
Required
(a) A balance sheet as at 19. August 1994 after the completion of
indicated above.
(b) Describe the features of:
(i) a rights issue of shares;
(ii) a bonus issue of shares.
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