accounting problem........請求解答

2008-04-03 1:46 am

Your brother paid about $5.90 for his shares in The Warehouse Group Limited. This indicates that the market value of The Warehouse Group Limited was close to $1.82 billion ($5.90 x 308.4 million shares). Explain why, including references to definitions and other guidance contained in the Framework for the Preparation and Presentation of Financial Statements, the reported equity in the Balance Sheet is significantly lower than $1.82 billion.

請求解答

回答 (1)

Jan

2008-04-05 2:17 am

✔ 最佳答案

The statement indicates that
$5.90 per share is 「 offered for the public」.
308.4 million shares of $5.90 each are 「issued at a premium.」

e.g.
cost of each share=$5
premium of each share=$0.9

After allotment,
the 「cost」of the shares issued (=$5*308.4 million)
will be posted to 「SHARE CAPITAL A/C」
which balance finally will be shown at B/S

while the premium of the shares (=$0.9*308.4 million)
will be posted to share premium a/c.

So, the reported equity(ISSUED SHARE CAPITAL) in the Balance Sheet
is significantly lower than $1.82 billion(=$5.90 x 308.4 million shares).

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