ACCA F3 Mock Exam Capital Structure
At 31 December 2004 a company’s capital structure was as follows:
Ordinary share capital $(900,000 shares of 25c each) $225,000.
Share premium account $500,000.
In the year ended 31 December 2005 the company made a rights issue of 1 share for every 2 held at $1 per share and this was taken up in full. Later in the year the ompany made a bonus issue of 1 share for every 5 held, using the share premium account for the purpose.
What was the company’s capital structure at 31 December 2005?
(Ordinary share capital and Share premium account)
Suggested Solution::
| Par Value 25c Each | No of Shares | Ordinary Shares | Share Premium |
| Info Given | 900,000 | 225,000 | 500,000 |
| Right Issue of 1 share for every 2 held at $1 | 450,000 | 112,500 | 337,500 |
| Total | 1,350,000 | 337,500 | 837,500 |
| Bonus issue of 1 share for every 5 held | 270,000 | 67,500 | -67,500 |
| Answer | 405,000 | 770,000 |
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