In the given problem following info is given
Particulars of Bat Ltd :
1. This company was formed on 1st April 2002.
2. It acquired the shares of Ball Ltd. as under:
Date of acquisition Number of Shares Cost (Rs.)
01.04.02 8,000 1,10,000
31.07.02 6,000 86,000
On 31.07.02, dividend at 10% was received from Ball Ltd. and was credited to Profit and loss account. On 31.07.02, it received bonus shares from Ball Ltd. in the ratio of one share on every four shares held.
So the company bat ltd will receive bonus & dividend on all 14000 shares or only on opening 8000 shares????
CAclubindia
