A company had an issued share capital of $400 000 made up of ordinary shares of $0.50 fully paid. The following transactions took place.
1. An issue of bonus shares on the basis of one ordinary share for every four ordinary shares already held was made.
2. Later, a rights issue of ordinary shares of one new share for every two already held at a premium of $0.15 per share was made. This issue was fully subscribed.
By how much will the company’s bank account be increased?
1 )
$125 000
2 )
$162 500
3 )
$250 000
$325 000
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