For The Book Co, share capital increased by $200,000 in total over a year in which there was a bonus issue of 20,000 new shares at $2 per share. The cash flow from the issue of shares is:

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Quizplus · Accepted Answer

A bonus issue does not generate cash flow as it involves issuing additional shares to existing shareholders without receiving cash. The increase in share capital due to the bonus issue is $40,000 (20,000 shares x $2), so the cash flow from the issue of shares is $200,000 - $40,000 = $160,000.

For the Book Co, Share Capital Increased by $200,000 in Total