Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

A company has $1000000 ordinary shares of $1 that were issued at $2.50. It also holds a $5\%$ debenture worth $300000$. Profit from operations for the year was $465000$. During the year, the directors paid an $8\%$ ordinary share dividend. By what amount did retained earnings rise during the year?

  • A$250000
  • B$370000
  • C$385000
  • D$400000

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