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

Preparation of financial statements — practice question

These transactions occurred in a limited company. 1. $50\,000$ was transferred from retained earnings into general reserve. 2. The company issued $200\,000$ ordinary shares of $1$ each at $2.50$ per share. 3. Non-current assets with a carrying value of $1\,250\,000$ were revalued to $1\,500\,000$. 4. Ordinary dividends of $100\,000$ were proposed. By how much did the company’s total equity increase?

  • A$450\,000$
  • B$500\,000$
  • C$650\,000$
  • D$750\,000$

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