Prepare the statement of financial position as at december

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Question - Phillips Limited has share capital of $100 million at January 1, 2020, which represented 10 million shares. The entity's retained earnings stood at $25 million and revaluation reserves of $75 million as at December 31, 2020. In addition to the above, the company had trade payable, building, inventory and cash of $50 million, $200 million, $30 million and $20 million respectively.

On December 30, 2020, the directors declared a four for five bonus issue, which was followed by a rights issue of one for ten shares at $12 per share.

Required -

a. Prepare the entity's statement of financial position as at December 31. 2020 before the issue of any new shares.

b. Prepare the statement of financial position as at December 31, 2020 after the issues declared by the entity's directors.

Reference no: EM133139401

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