At 1 July 2004 a limited liability company’s capital structure was as follows:
$
Share capital 1,000,000 shares of 50c each 500,000
Share premium account 400,000
In the year ended 30 June 2005 the company made the following share issues:
1 January 2005
A bonus issue of one share for every four in issue at that date, using the share premium account.
1 April 2005
A rights issue of one share for every ten in issue at that date, at $1·50 per share.
What will be the balances on the company’s share capital and share premium accounts at 30 June 2005 as a
result of these issues?
Share capital        Share premium account
    $                                $
A 687,500                650,000
B 675,000                375,000
C 687,500               150,000
D 687,500                400,000

D