1.5. Preparation of financial statements
A subsection of Accounting, 9706, through 1. Financial accounting (AS Level)
Listing 10 of 637 questions
On 1 January, X Limited had share capital of 100 000 ordinary shares which had been issued at their par value of $1 each. There was no share premium account. On 1 March, a bonus issue of one new ordinary share for every five ordinary shares held was made from retained earnings. On 1 June, the company made a rights issue of one new ordinary share for every four ordinary shares held at a price of $1.50 each. All the rights were taken up. How much was recorded in the share premium account?
9706_s22_qp_12
MCQ
2022
Paper 1, Variant 2
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K Limited’s financial year ended on 31 December 2021. The company’s income statement for the year ended on that date has already been prepared. The following information was available at the year‑end. $ 8% Debentures (2022) 120 000 Bank overdraft 4 700 Dividends paid 96 000 Inventory 49 400 Non‑current assets at cost 960 000 Non‑current assets provision for depreciation 170 000 Ordinary share capital: shares of $0.25 each at 31 December 2021 480 000 Other payables 2 700 Other receivables 1 400 Profit for the year 99 400 Retained earnings at 1 January 2021 133 000 Share premium at 31 December 2021 90 000 Trade payables 25 900 Trade receivables 18 900 On 1 July 2021, the directors had made a rights issue of one ordinary share for every two ordinary shares in issue. The rights issue was made at $0.35 per share and was fully subscribed. REQUIRED Calculate the profit from operations for the year ended 31 December 2021. Calculate the amount raised by the rights issue on 1 July 2021. Prepare a statement of changes in equity for the year ended 31 December 2021. K Limited Statement of changes in equity for the year ended 31 December 2021 Share capital $ Share premium $ Retained earnings $ Total $ Balances at 1 January 2021 Prepare the statement of financial position at 31 December 2021. K Limited Statement of financial position at 31 December 2021 $ Explain the meaning of each of the following terms. Revenue reserve Capital reserve Additional information The directors of K Limited will require additional finance in 2022 to cover the cost of opening a new branch of the business. They are considering two options. Option 1: Make a further rights issue of shares. Option 2: Make an issue of 8% debentures. REQUIRED Advise the directors which option they should choose. Justify your answer by discussing both options.
9706_s22_qp_23
THEORY
2022
Paper 2, Variant 3
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X Limited had the following equity on 1 January. $ ordinary share capital ($1 shares) 400 000 share premium 30 000 general reserve 10 000 retained earnings 70 000 During the year ended 31 December, the following transactions took place. 1 January a bonus issue of 1 ordinary share for every 8 ordinary shares; it is the company’s policy to keep its reserves in the most flexible form 1 July an issue of debentures for $150 000 1 December a rights issue of 1 ordinary share for every 15 ordinary shares at a price of $1.60 per share; the rights issue was fully taken up 31 December profit for the year ended 31 December was $120 000 What was the total equity at 31 December?
9706_s23_qp_12
MCQ
2023
Paper 1, Variant 2
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