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

Preparation of financial statements — practice question

A company has these reserves: Share premium $60\,000 Revaluation reserve $75\,000 General reserve $10\,000 Retained earnings $21\,500 The directors want to carry out a bonus issue of ordinary shares of $1 each. What is the greatest number of bonus shares that the company could issue?

  • A$31\,500
  • B$91\,500
  • C$135\,000
  • D$166\,500

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