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SSC Financial and Cost Accounting P-1 QUESTION #6088
Question 1

A company has the following reserves:

  • Share premium: $60,000
  • Revaluation reserve: $75,000
  • General reserve: $10,000
  • Retained earnings: $21,500

What is the maximum number of $1 bonus shares the company can issue?

  • 31,500
  • 91,500
  • 135,000
  • 166,500✔️
Correct Answer Explanation

A bonus issue can be made from any reserve, including capital reserves (Share Premium, Revaluation) and revenue reserves (General, Retained). Total = $60,000 + $75,000 + $10,000 + $21,500 = $166,500.