Question: Clockmaker Ltd . presents the following Equity in the Statement of Financial Position: Capital of 2 2 0 , 0 0 0 2 2 0

Clockmaker Ltd. presents the following Equity in the Statement of Financial Position: Capital of 220,000220,000 shares of 22 each and Share Premium of 350,000350,000. Clockmaker Ltd. makes a 11 for 44 bonus issue. Considering the previous information, which of the following statements is correct? a. The company issues 55,00055,000 shares. Cash increases by 110,000110,000 and capital decreases in the same amount. b. The company issues 255,000255,000 shares and share premium increases in 110,000110,000. c. The company issues 55,00055,000 shares. Share premium decreases by 55,00055,000 and capital increases in the same amount. d. None of the answers is true.

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