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

Preparation of financial statements — practice question

The trial balance at 31 December 2015 contained the following figures: ordinary share capital ($1 shares) $500000; retained earnings $300000. On 1 January 2016, the directors set up the general reserve of $70000. At the same time, $200000 ordinary shares were issued for $300000. By what amount did total reserves rise on 1 January 2016?

  • A$100000
  • B$170000
  • C$300000
  • D$370000

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI