Accounting Multiple Choice Question – 13 June 2021

A company’s share capital consists of 150,000 ordinary shares of £0.50 each. 

It makes a rights issue of 1 ordinary share for every 3 already held at £1.20 per share. 

It then makes a bonus issue of 1 share for every 5 held. 

Which amount will be shown in the Balance Sheet for share capital? 

Select ONE answer:

1. £120,000
2. £145,000
3. £155,000
4. £165,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct ==> (150,000 * £0.5) = 75,000 + (1/3 * 150,000 * £0.5) = £100,000 * 1/5 ==> £120,000
2. Not correct
3. Not correct
4. Not correct

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