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

Preparation of financial statements — practice question

K Limited’s financial year finished on 31 December 2021. The income statement for the year ending on that date had already been drawn up. The information below was available at the year-end.
(a)[2]

Calculate the profit from operations for the year ending 31 December 2021.

(b)[3]

Calculate the funds raised by the rights issue on 1 July 2021.

(c)[7]

Prepare a statement of changes in equity for K Limited for the year ended 31 December 2021.

(d)[7]

Prepare the statement of financial position of K Limited at 31 December 2021.

(e(i))[2]

The term is Revenue reserve.

(e(ii))[2]

The term is Capital reserve.

(f)[7]

Advise the directors on which option they ought to select. Justify your answer by covering both options.

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