A Level Accounting (9706)•9706/12/O/N/18

Explanation
Ambiguous transaction details prevent precise calculation
Steps:
- Initial share capital 50 par implies 1,680 shares; retained earnings $50,000.
- Transaction 1 offers 1 new share for every 2 held (840 new shares), but price unspecified, so could be bonus (reduces RE by $42,000) or cash at/above par (no RE impact).
- Transaction 2 offers 1 new share for every 3 held at $1.30 (below par), fully subscribed; discount treatment unclear (may or may not reduce RE).
- RE impact depends on assumptions for price/subscription/discount accounting, which are missing.
Not enough information.
Final answer: Not enough information.
Topic: Preparation of financial statements
Practice more A Level Accounting (9706) questions on mMCQ.me