A company's Balance Sheet at 31 December 2008 includes:
$ Ordinary shares of $1.00 12 000
Profit and Loss Account 4000
In January 2009, the company made a bonus issue of one share for every four held.
In June 2009, the company made a rights issue at $1.60 of one share for every two held.
By how much did these transactions increase the company's bank balance?

Q: What topic does this question test?

This question tests Company Accounts in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Q: Which exam paper is this question from?

This question appeared in the Cambridge A-Level Accounting Oct/Nov 2009 examination, Paper 1 Variant 2 (9706_w09_qp_12.pdf).

Question

A company's Balance Sheet at 31 December 2008 includes:
$ Ordinary shares of $1.00 12 000
Profit and Loss Account 4000
In January 2009, the company made a bonus issue of one share for every four held.
In June 2009, the company made a rights issue at $1.60 of one share for every two held.
By how much did these transactions increase the company's bank balance?

Oracle Prep · Accepted Answer

The correct answer is C: $12 800.

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