At 1 January 20X2 the capital structure of ABC, a limited liability company, was as follows:
| $ | |
| Issued share capital 250,000 ordinary shares of 25c each | 62,500 |
| Share premium account | 75,000 |
On 1 April 20X2 the company made an issue of 50,000 25c shares at $1.20 each, and on 1 July the company made a bonus (capitalisation) issue of one share for every five in issue at the time, using the share premium account for the purpose.
Calculate the company’s share capital and share premium account at 31 December 20X2.
Answer
| $ | |
| Share capital @ 1.1.20X2 | 62,500 |
| Issue on 1.4.20X2 (50,000 @ 25c) | 12,500 |
| Bonus issue (300,000/5 x 1) @ 25c | 15,000 |
| Share capital as at 31.12.20X2 | 90,000 |
| Share premium @ 1.1.20X2 | 75,000 |
| 1.4.20X2 50,000 shares @ (120c – 25c) | 47,500 |
| Bonus issue (as above) | (15,000) |
| 107,500 |
Public issue
Dr. Cash………………………………60,000
Cr. Share capital……………………………………. 12,500
Cr. Share premium…………………………………47,500
Bonus Issue
Dr. share premium………………15,000
Cr. Share Capital…………………………………..…15,000