At 1 July 20X4 a limited liability company’s capital structure was as follows:
Share capital 1,000,000 shares of 50c each 500,000
Share premium account 400,000
In the year ended 30 June 20X5 the company made the following share issues:
1 January 20X5:
A bonus issue of one share for every four in issue at that date, using the share premium account.
1 April 20X5
A rights issue of one share for every ten in issue at that date, at $1.50 per share.
What will be the balances on the company’s share capital and share premium accounts at 30 June
20X5 as a result of these issues?
Share capital Share premium account
A 687,500 650,000
B 675,000 375,000
C 687,500 150,000
D 687,500 400,000