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Giggles Ltd Has 2 Million Shares Issued B) C) D) None of the Given Answers Are Correct

Question 48

Multiple Choice

Giggles Ltd has 2 million shares issued.The directors have elected,with the support of a resolution passed at a general meeting,to undertake a 1: 2 share split so that there will be 4 million issued shares.The shares were originally issued at a price of $2 each.What is the summary entry to record the share split?


A)
Dr Retained profits 1000000Cr Share capital-ordinary shares 1000000\begin{array} { | l | l | l | l | } \hline \mathrm { Dr } & \text { Retained profits } & 1000000 & \\\hline \mathrm { Cr } & \text { Share capital-ordinary shares } & & 1000000 \\\hline\end{array}
B)
Dr Retained profits 2000000Cr Share capital-ordinary shares 2000000\begin{array} { | l | l | l | l | } \hline \mathrm { Dr } & \text { Retained profits } & 2000000 & \\\hline \mathrm { Cr } & \text { Share capital-ordinary shares } & & 2000000 \\\hline\end{array}
C)
Dr Cash at bank 2000000Cr Share capital-ordinary shares 2000000\begin{array} { | l | l | l | l | } \hline \mathrm { Dr } & \text { Cash at bank } & 2000000 & \\\hline \mathrm { Cr } & \text { Share capital-ordinary shares } & & 2000000 \\\hline\end{array}
D) None of the given answers are correct.

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