1. Financial accounting (AS Level)
A section of Accounting, 9706
Listing 10 of 1775 questions
A company provided the following information. at 1 January $ ordinary shares of $1 each 100 000 retained earnings 95 000 The following actions took place during the year ended 31 December. A bonus issue of one ordinary share for every two ordinary shares held on 1 January. A rights issue of 50 000 ordinary shares at $1.25 each. The issue was fully subscribed. A transfer, $25 000, to create a general reserve. A dividend, $11 250, was paid. The profit for the year ended 31 December was $68 500. What was the total shareholders’ equity at 31 December?
9706_w22_qp_13
MCQ
2022
Paper 1, Variant 3
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The directors of H Limited provided the following details from the statement of financial position at 30 September 2021. $ Equity and reserves Share capital (ordinary shares of $0.50 each) 200 000 Share premium 50 000 Retained earnings 120 000 During the year ended 30 September 2022, the following transactions took place. Date Transaction 1 November 2021 Paid a final dividend of $0.06 per ordinary share. 1 January 2022 Made a rights issue of two ordinary shares for every five shares held at a price of $0.60. The issue was fully subscribed. 1 July 2022 Paid an interim dividend of $0.02 per ordinary share. 31 August 2022 Made a bonus issue of one ordinary share for every four shares held. The directors decided to leave the reserves in the most flexible form. REQUIRED Prepare journal entries to record transactions 1 – 4. Dates and narratives are not required. Workings: State three reasons why a company may make a bonus issue of shares. State two features of preference shares.
9706_w22_qp_21
THEORY
2022
Paper 2, Variant 1
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R Limited is a retail company. REQUIRED Explain the meaning of 8% debentures (2025–2026). Additional information The directors of R Limited provided the following information at 1 October 2021. $000 Building at valuation Retained earnings Revaluation reserve Share capital (ordinary shares of $0.50 each) 1 200 Share premium The following transactions took place during the year ended 30 September 2022. 31 December 2021 Paid a final dividend of $0.06 per share. 31 March 2022 Made a rights issue of one ordinary share for every four shares held at a price of $0.65. The issue was fully subscribed. 31 July 2022 Made a bonus issue of one ordinary share for every six shares held. The directors decided to leave the reserves in the most flexible form. 31 August 2022 Paid an interim dividend of $0.04 per share. 30 September 2022 The building, which had originally cost $80 000, was revalued to $115 000. The profit for the year ended 30 September 2022 was $87 000. REQUIRED Prepare the statement of changes in equity for the year ended 30 September 2022. R Limited Statement of changes in equity for the year ended 30 September 2022 Share capital $000 Share premium $000 Revaluation reserve $000 Retained earnings $000 Total $000 At 1 October 2021 1 200 1 700 At 30 September 2022 Workings: Explain why dividends proposed at the end of a financial year are not shown in a company’s statement of financial position.
9706_w22_qp_23
THEORY
2022
Paper 2, Variant 3
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The following information is available for a limited company’s financial year ended 31 December. At 1 January the total equity was $350 000. This included 100 000 ordinary shares of $1 each. On 30 June there was a rights issue of 10 000 ordinary shares for $1.50 each. This was fully subscribed. On 1 October the company paid a dividend of $0.10 per ordinary share. On 1 December a dividend was proposed totalling $20 000. Profit for the year was $26 500. What was the total equity on 31 December?
9706_w23_qp_11
MCQ
2023
Paper 1, Variant 1
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P Limited sells electronic goods online. The directors provided the following information. Balances At 31 July 2023 $ At 1 August 2022 $ 8% debenture (2026) 36 000 – Inventory 43 190 36 800 Other payables: administrative expenses – Other receivables: administrative expenses 1 820 Other receivables: distribution costs 1 490 – Trade payables 25 250 29 610 Bank account extract for the year ended 31 July 2023 $ Payments To credit suppliers 122 050 Administrative expenses 66 920 Distribution costs 51 730 Receipts From customers 284 200 The following information is also available. All goods are despatched to customers immediately on receipt of payment. Inventory at 31 July 2023 included damaged items that had cost $3600. One half of these items will be scrapped and have no value. The remaining items will be sold for $900 after repairs costing $420. The 8% debenture (2026) was issued on 1 April 2023. The charge for taxation was estimated to be $10 700. Prepare the statement of profit or loss for the year ended 31 July 2023. Use the space provided to show your workings. P Limited Statement of profit or loss for the year ended 31 July 2023 $ Workings: Cost of sales Administrative expenses Distribution costs Additional information Balances at 1 August 2022 $ Share capital (ordinary shares of $0.50 each) 120 000 Share premium 19 000 Retained earnings 23 560 On 1 September 2022, a bonus issue of shares was made of one ordinary share for every six shares held. Reserves were maintained in their most flexible form. On 1 January 2023, a final dividend of $0.07 per share was paid on all shares in issue at 1 August 2022. On 31 March 2023, a rights issue of one ordinary share for every four shares held was made at a premium of $0.15 per share. The issue was fully subscribed. Prepare the statement of changes in equity for the year ended 31 July 2023. P Limited Statement of changes in equity for the year ended 31 July 2023 Share capital $ Share premium $ Retained earnings $ Total $ At 1 August 2022 120 000 19 000 23 560 162 560 State two examples of revenue reserves of a limited company. Advise the directors whether or not they were correct to make a bonus issue of shares rather than make a new issue of shares. Justify your answer.
9706_w23_qp_22
THEORY
2023
Paper 2, Variant 2
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The statement of financial position of a company at 31 December showed the following: $ issued share capital: 200000 ordinary shares at $1 per share During the following year, the company carried out the following: On 1 January made a rights issue of one ordinary share for every five ordinary shares held. The share issue price was $1.50 per ordinary share and the issue was fully subscribed. On 1 July made a bonus issue of one ordinary share for every four ordinary shares held at that date. What was the amount of cash received by the company in respect of these transactions?
9706_w24_qp_12
MCQ
2024
Paper 1, Variant 2
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A company provided the following information for the financial year ended 31 December. 31 December $ 1 January $ ordinary share capital ($1 shares) − share premium − general reserve retained earnings During the year a bonus issue of one ordinary share for every five ordinary shares was made. It is the company’s policy to keep its reserves in the most flexible form. A dividend of $0.15 per share was paid during the year on all ordinary shares held on 1 January. What was the profit for the year?
9706_w24_qp_13
MCQ
2024
Paper 1, Variant 3
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Questions Discovered
1775