Home For AAT student members General AAT student discussion
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚

Financial statements share issue level 4

Hi can anyone please tell me how to do this question?
600,000 ordinary shares of 50p each and retained earnings of £150,000. During financial year a rights issue of shares was made. The shares were issued on basis of 2 new shares for every 5 existing shares at issue price of 70p. The issue was fully subscribed. What will be the cash flow from the rights issue. Many thanks


  • CeeJaySixCeeJaySix Well-Known Registered Posts: 645
    600,000 ordinary shares.
    Rights issue of 2 for every 5 held.

    => 600,000 / 5 x 2 = 240,000 new shares @70p each = £168,000 cash received.
  • claraclara Registered Posts: 19
    Thank you so much CeeJaySix for your help. Much appreciated.
Sign In or Register to comment.