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

Preparation of financial statements — practice question

A company has these items: $12000$ ordinary shares of $1$ each. $10\%$ debenture $10000$. For the year ended 31 December 2016, it recorded a loss of $15000$. On 30 September 2016, an interim ordinary dividend of $0.20$ per ordinary share was paid. At 31 December 2016, an ordinary dividend of $0.40$ per ordinary share was proposed. The retained earnings figure in the statement of changes in equity at 31 December 2016 was $20000$. What was the retained earnings balance at 1 January 2016?

  • A$37400$
  • B$38400$
  • C$42200$
  • D$43200$

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