ACCA FR · Chapter 14 · Question 7 of 15
Waterbuck Co's equity share capital rose from $1000k to $1400k during the year, and its share premium rose from $300k to $450k. During the year it made a bonus issue of $100k, funded from retained earnings. The remaining increase came from an issue of shares for cash. What is the cash inflow from issuing shares?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $450k
Explanation
Total increase in share capital and premium = (1400 + 450) - (1000 + 300) = $550k. The bonus issue of $100k from retained earnings is non-cash, so cash raised = 550 - 100 = $450k.
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