The Balance Sheet of the Badlirun Company Plc as at 30 September 1999 was as follows:...

 

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The Balance Sheet of the Badlirun Company Plc as at 30 September 1999 was as follows: $000 ii. iv. V. a) Fixed assets Current assets Less: Current liabilities b) Financed by Issued and paid up share capital Ordinary shares of $1 each 7% Redeemable preference shares of $1 each Reserves: Share premium Profit and loss 185 96 75 84 $000 600 Since that date the following transactions have taken place: i. On 9 November 1999 a bonus issue was made of one for five of fully-paid ordinary shares, utilising the share premium. These do not rank for dividends during the current financial year. The redeemable preference shares, which had been issued at par, were redeemed on 24 January 2000 at a premium of $0.50 per share. This was financed by the issue of 6% redeemable preference shares of $1 each at $1.20 per share. These rank for dividend from 1 October 2000. On 5 March 2000 a rights issue was made of one for four ordinary shares of $1 each in the issue at that date at $1.20 per share. The rights issue was fully taken up. These do not rank for dividend during the current financial year. On 14 September 2000 fixed assets costing $15 000 were purchased on credit. 689 350 180 159 689 On 23 October 2000 the company paid a dividend on ordinary share capital of $0.08 per share for the year ended 30 September 2000. Explain what you understand by: i) rights issue bonus issue Draw up the Balance Sheet of the Badlirun Company as at 30 September 2000. Assume no other transactions took place. The Balance Sheet of the Badlirun Company Plc as at 30 September 1999 was as follows: $000 ii. iv. V. a) Fixed assets Current assets Less: Current liabilities b) Financed by Issued and paid up share capital Ordinary shares of $1 each 7% Redeemable preference shares of $1 each Reserves: Share premium Profit and loss 185 96 75 84 $000 600 Since that date the following transactions have taken place: i. On 9 November 1999 a bonus issue was made of one for five of fully-paid ordinary shares, utilising the share premium. These do not rank for dividends during the current financial year. The redeemable preference shares, which had been issued at par, were redeemed on 24 January 2000 at a premium of $0.50 per share. This was financed by the issue of 6% redeemable preference shares of $1 each at $1.20 per share. These rank for dividend from 1 October 2000. On 5 March 2000 a rights issue was made of one for four ordinary shares of $1 each in the issue at that date at $1.20 per share. The rights issue was fully taken up. These do not rank for dividend during the current financial year. On 14 September 2000 fixed assets costing $15 000 were purchased on credit. 689 350 180 159 689 On 23 October 2000 the company paid a dividend on ordinary share capital of $0.08 per share for the year ended 30 September 2000. Explain what you understand by: i) rights issue bonus issue Draw up the Balance Sheet of the Badlirun Company as at 30 September 2000. Assume no other transactions took place.

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Explain what you understand by rights issue A rights issue is an issue of new shares that are offered to existing shareholders in proportion to their ... View the full answer