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Question: berry ltd is a public retail company that is currently...

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Berry Ltd is a public retail company that is currently expanding their operations. In order to do this, the directors need a substantial injection of cash to finance the new development.

 

Required: You have been asked as the graduate accountant, to prepare a report to the board of directors summarising the major differences between the company raising funds by a share issue versus the issue of debentures. Include in your report the different effects each choice would have on the financial statements, what advantages (if any) each choice would provide the company and what financial commitments the company would be liable for under each option.

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