1. Financial accounting (AS Level)
A section of Accounting, 9706
Listing 10 of 1775 questions
M Limited was formed five years ago. On 1 January 2019 the company’s statement of financial position included the following details. $000 Equity Share capital – ordinary shares of $0.25 each Share premium Retained earnings On 1 July 2019 shareholders were paid a dividend of $0.05 per share. REQUIRED Calculate the total dividend paid. Additional information On 1 September 2019 the directors made a rights issue of two ordinary shares for every three shares held at a price of $0.40 per share. The issue was fully subscribed. REQUIRED Describe one way in which a shareholder can benefit from taking up a rights issue. Calculate the amount raised by the rights issue. Additional information The company made a profit for the year ended 31 December 2019 of $324 000. REQUIRED Prepare the statement of changes in equity for the year ended 31 December 2019. M Limited Statement of changes in equity for the year ended 31 December 2019 Share capital $000 Share premium $000 Retained earnings $000 Total $000 Describe two factors directors should take into account when deciding on a dividend to be paid to the shareholders.
9706_w20_qp_21
THEORY
2020
Paper 2, Variant 1
View
The following balances have been extracted from the books of account of G Limited at 1 October 2020. Account $ 6% debentures (2022–23) 50 000 Retained earnings 34 500 Revaluation reserve 28 000 During the year ended 30 September 2021 the following took place. Date Transaction 1 November 2020 Made a rights issue of one ordinary share of $1 each for every ten shares held at a premium of 20%. The issue was fully subscribed. 1 March 2021 Paid a dividend of $0.05 per share on all shares in issue at that date. 1 May 2021 Made a bonus issue of one ordinary share of $1 each for every four shares held. The directors decided to leave the reserves in the most flexible form. 30 September 2021 Revalued property downwards by $35 000. The profit for the year ended 30 September 2021 was $96 000. REQUIRED Prepare the statement of changes in equity for the year ended 30 September 2021. G Limited Statement of changes in equity for the year ended 30 September 2021 Share capital $ Share premium $ Revaluation reserve $ Retained earnings $ Total $ At 1 October 2020 28 000 34 500 At 30 September 2021 440 000 4 600 Workings: Additional information The directors of G Limited wish to raise $500 000 additional capital for expansion. They have identified two options to raise the full amount. Option 1: Issue ordinary shares of $1 each. Option 2: Issue 8% preference shares. REQUIRED Advise the directors which option they should choose. Justify your answer. Additional information The finance director has suggested that the company could issue further debentures. REQUIRED State two characteristics of a debenture.
9706_w21_qp_21
THEORY
2021
Paper 2, Variant 1
View
The following information has been extracted from the financial statements of D Limited at 30 June 2020. $ Share capital (ordinary shares of $0.50 each) 150 000 Share premium 25 000 Retained earnings 28 700 Transactions during the year ended 30 June 2021. 1 August 2020 Made a rights issue of one ordinary share for every five shares held at $0.70 per share. The issue was fully subscribed. 1 December 2020 Paid a dividend of $0.02 per share on all shares in issue at that date. 1 March 2021 Made a bonus issue of two ordinary shares for every nine shares held. Reserves were left in the most flexible form. 30 June 2021 Proposed a final dividend of 2%. The profit for the year ended 30 June 2021 was $76 520. REQUIRED Prepare the following ledger accounts. Ordinary share capital Date Details $ Date Details $ Share premium Date Details $ Date Details $ Retained earnings Date Details $ Date Details $ State two differences between capital reserves and revenue reserves. Explain one reason why a company might make a bonus issue of shares.
9706_w21_qp_22
THEORY
2021
Paper 2, Variant 2
View
Questions Discovered
1775