Share issuance at premium with reserve capitalization for flexibility Steps:

• Original share capital: $200,000; issue 100,000 new shares at$1 nominal, adding $100,000 to capital (total$300,000).
• Cash received: 100,000 × $4 =$400,000; add $300,000 to share premium (total premium$380,000).
• To maintain flexible reserves, capitalize $200,000 from premium and revaluation into capital, but totals mismatch expected equity increase.
• Not enough information on additional changes or adjustments to reconcile totals.

Why A is correct:

• Not enough information.

Why the others are wrong:

• B: Incorrect capitalization, ignores premium calculation.
• C: Retains partial revaluation, violating flexibility goal.
• D: Overstates capital and retains revaluation.

Final answer: A