• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Exercise 6.6 page 20 Chapter 6_CMP

M

Martha Boile

Member
Hello everyone :) :)

It is the first time that I will take the institute's exams. I will start with CT2. I can't understand the solution given in the book for Exercise 6.6 on page 20 (Chapter 6). I am using the Combined Material Pack of BPP. Any ideas? Thank you in advance. :) :)
 
Can you tell me where in the solution you come unstuck? The question appears to be a rights issue, and how it affects the reserves in a company's SPF. Can you tell me where you get to in the maths before you hit a stumbling block?
 
Thank you for your answer

I understand that the ex-rights price share is equal to 200 (first rights issue in question 6.5). I can't understand how the other accounts are affected. Thank you in advance.

Martha
 
Hi Martha - have you looked at the solutions on page 37? You need to consider how much cash is raised from issuing new shares, and then how that additional cash and the new shares are reflected in the SoFP.

Cash increases in the current assets. The share capital increases as does the share premium reserve.
 
You must log in or register to reply here.
Back
Top