1.5. Preparation of financial statements
A subsection of Accounting, 9706, through 1. Financial accounting (AS Level)
Listing 10 of 637 questions
The following is an extract from the statement of financial position of Chopin Limited at 30 June 2015: During the year ended 30 June 2016, the following took place: 1 November 2015 Non-current assets were revalued to $1 000 000. 1 January 2016 A bonus issue of shares was made. The terms of the issue were 1 new share for every 10 shares in existence. Reserves were maintained in the most flexible form. 1 April 2016 Dividend of $0.02 per share was paid. Profit for the year ended 30 June 2016 was $230 809. REQUIRED Prepare a statement of changes in equity for the year ended 30 June 2016. $ Non-current assets 750 000 Ordinary shares of $0.25 each 300 000 Share premium 20 000 Retained earnings 635 210 Explain why the company should not use its revaluation reserve to pay dividends to shareholders. State two uses of a share premium account. State the difference between a bonus issue of shares and a rights issue of shares.
9706_w16_qp_21
THEORY
2016
Paper 2, Variant 1
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The directors of Rebuild Limited are preparing the financial statements for the year ended 31 December 2015. The equity section of the statement of financial position at 31 December 2014 was as follows: $ Ordinary shares of $2 each, fully paid 240 000 Share premium 8 000 General reserve 40 000 Retained earnings 75 500 363 500 During the year ended 31 December 2015, the following transactions took place: March 1 Issued 10 000 ordinary shares at $2.10 each March 31 Paid final dividend of 3% on all shares in issue at 31 December 2014 December 31 The directors revalued the company premises upwards by $20 000 The profit for the year ended 31 December 2015 was $47 100. REQUIRED Prepare the statement of changes in equity for the year ended 31 December 2015. Additional information The directors of Rebuild Limited made a bonus issue of ordinary shares on 30 June 2016. The basis of the issue was one ordinary share for every twenty-five ordinary shares held. The company policy is to leave reserves in their most flexible form. The profit for the 6 months ended 30 June 2016 was $25 000. REQUIRED Prepare the statement of changes in equity for the 6 months ended 30 June 2016. State two differences between ordinary shares and debentures. Additional information The following item appears on the statement of financial position of Rebuild Limited at 31 December 2015: 6% debentures (2018–2020) $60 000 REQUIRED State the significance of (2018–2020). State why an issue of debentures does not appear in the statement of changes in equity.
9706_w16_qp_22
THEORY
2016
Paper 2, Variant 2
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Dolphin Limited is a bakery producing goods for wholesale. The issued share capital of the company is 300 000 ordinary shares of $2 each. The directors offered a further 125 000 ordinary shares to family and friends. The terms of issue were: 1 April 2016 – Payable on application $1.00 per share 30 June 2016 – Final payment $1.10 per share Applications were received for 150 000 shares. All monies received were entered into a holding account called ‘Application for Shares’. Transfers were made from this account to the relevant ledger accounts. The applicants were issued shares and all final payments were received on the due date. Excess application monies were returned to applicants. REQUIRED Prepare the relevant ledger accounts to record the issue of shares. Explain two differences between ordinary shares and preference shares. Name one capital reserve.
9706_w16_qp_23
THEORY
2016
Paper 2, Variant 3
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Questions Discovered
637