Financial statements share issue level 4

clara

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

CeeJaySix

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.

clara

Thank you so much CeeJaySix for your help. Much appreciated.