ACCA F3 Mock Exam Capital Structure
At 31 December 2004 a company’s capital structure was as follows:
Ordinary share capital $(600,000 shares of 25c each) $150,000.
Share premium account $800,000.
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 | 600,000 | 150,000 | 800,000 |
| Right Issue of 1 share for every 2 held at $1 | 300,000 | 75,000 | 225,000 |
| Total | 900,000 | 225,000 | 1,025,000 |
| Bonus issue of 1 share for every 5 held | 180,000 | 45,000 | -45,000 |
| Answer | 270,000 | 980,000 |
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