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Explain the effect on the accounting equation of each of the following transactions:

(a) At the start of Year 1, Bright Ltd issues 200,000 shares at nominal value 25 pence per share, receiving £50,000 in cash.

(b) At the end of Year 2, Bright Ltd issues a further 100,000 shares to an investor at an agreed price of 75 pence per share, receiving £75,000 in cash.

(c) At the end of Year 3 the directors of Bright Ltd obtain a market value of £90,000 for a company property which originally cost £70,000. They wish to record this in the statement of financial position (balance sheet).

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91697428

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