Gce Model Questions Vol1 2025 Financial Accounting Question 45

A company has 100,000 ordinary shares of \(\pounds1\) each. At the beginning of the year the balances were: share capital \(\pounds100{,}000\), share premium \(\pounds20{,}000\), retained earnings \(\pounds50{,}000\). During the year the following occurred:\n- Profit before tax: \(\pounds80{,}000\)\n- Tax expense: \(\pounds24{,}000\)\n- An interim dividend of \(\pounds0.20\) per share was paid.\n- A rights issue was made: each existing shareholder could purchase one additional share at \(\pounds2\) (nominal \(\pounds1\) plus \(\pounds1\) share premium). All rights were exercised.\nNo other transactions took place. Compute (i) the closing balances of share capital, share premium and retained earnings, (ii) the total equity at year‑end, and (iii) the basic earnings per share after the rights issue.