Chapter 15

Chapter 15 - Solutions to Gripping IFRS Graded Questions...

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Solutions to Gripping IFRS : Graded Questions Share capital Chapter 15: Page 1 Solution 15.1 Journals Debit Credit 30 May 20X4 Bank (10 000 x 6) 60 000 Ordinary shares (10 000 x 1) 10 000 Share premium (balancing) 50 000 Rights issue at C6 (market price of C9) Share premium 15 000 Bank 15 000 Share issue expenses written off Share premium (30 000 + 50 000 – 15 000) 65 000 Retained earnings (balancing) 47 000 Ordinary share capital (112 000 x C1) 112 000 Capitalisation issue of ordinary shares 112 000 (W1) x C1 PV = 112 000 W1: Number of shares issued in terms of the capitalization issue Actual Opening balance 270 000 Rights issue 10 000 280 000 Capitalisation issue 280 000 / 5 x 2 112 000 Closing balance 392 000
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Solutions to Gripping IFRS : Graded Questions Share capital Chapter 15: Page 2 Solution 15.2 a) WOLVERINE LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 20X3 Share capital Share premium Preference share capital Non distributable reserve Retained earnings Total C C C C C C Balance at 31 March 20X1 1 800 000 150 000 500 000 100 000 9 500 000 12 050 000 Share issue on 1 July 20X1 200 000 40 000 - - - 240 000 Share issue expenses - (10 000) - - (10 000) Total comprehensive income - - - - 930 000 930 000 Preference dividend declared - - - - (60 000) (60 000) Balance at 31 March 20X2 2 000 000 180 000 500 000 100 000 10 370 000 13 150 000 Capitalisation issue 500 000 (180 000) - - (320 000) - Total comprehensive income - - - 50 000 1 100 000 1 150 000 Ordinary dividend declared - - - - (125 000) (125 000) Preference dividend declared - - - - (60 000) (60 000) Balance at 31 March 20X3 2 500 000 - 500 000 150 000 10 965 000 14 115 000 b) WOLVERINE LIMITED EXTRACT OF NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 20X3 3. Earnings per share Earnings per share is based on earnings of C 1 040 000 (20X2: 870 000) and on a weighted average of 2 500 000 shares (20X2: 2 437 500). There was a capitalisation issue during the year of 1 share for every 4 shares held. Comparative number of shares have been restated. 20X3 20X2 Profit for the period 1 100 000 930 000 Preference dividend declared (60 000) (60 000) Earnings 1 040 000 870 000
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Solutions to Gripping IFRS : Graded Questions Share capital Chapter 15: Page 3 Solution 15.2 continued . . . 4. Share capital Authorised 5 000 000 ordinary shares of C1 each. 100 000 12% non-cumulative preference shares of C5 each. Issued 20X3 20X2 C C 2 500 000 ordinary shares of C1 each 2 500 000 2 000 000 ordinary shares of C1 each 2 000 000 100 000 12% non-cumulative preference shares of C5 each 500 000 500 000 50 000 shares were taken up by the directors wives in 20X2.
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Chapter 15 - Solutions to Gripping IFRS Graded Questions...

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