Financial statements share issue level 4

clara
clara Registered Posts: 19 New contributor 🐸
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

Comments

  • CeeJaySix
    CeeJaySix 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.
  • clara
    clara Registered Posts: 19 New contributor 🐸
    Thank you so much CeeJaySix for your help. Much appreciated.
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