1.5. Preparation of financial statements
A subsection of Accounting, 9706, through 1. Financial accounting (AS Level)
Listing 10 of 637 questions
C Limited’s statement of financial position at 31 December 2020 is shown with comparative figures at 31 December 2019. At 31 December $000 $000 Assets Non-current assets Current assets Inventory Trade and other receivables Cash and cash equivalents Total assets Equity and liabilities Equity Ordinary shares Share premium - Retained earnings Revaluation reserve - Total equity Non-current liabilities 8% Debentures (2025) Current liabilities Trade and other payables Total equity and liabilities The following information is also available. The company’s issued capital consists of ordinary shares of $0.25 each. On 1 January 2020 the directors revalued the property upwards by $300 000. There were no purchases or disposals of non-current assets during the year. On 1 July 2020 the directors made a bonus issue of ordinary shares. There were no other changes in share capital during the year. REQUIRED Explain two reasons for making a bonus issue of shares. Calculate the number of bonus shares issued on 1 July 2020. Prepare the journal entry recording the bonus issue on 1 July 2020. A narrative is required. Journal Dr Cr $000 $000 Identify three factors that directors of a company should consider when deciding on the amount of a proposed dividend. Additional information The directors of C Limited wish to propose a dividend of $0.01 per share on all shares in issue at 31 December 2020. REQUIRED Calculate the amount of the proposed dividend.
9706_s21_qp_21
THEORY
2021
Paper 2, Variant 1
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Questions Discovered
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