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

Preparation of financial statements — practice question

Ben and George turned their partnership into a limited company, M Limited.
(a)[4]

Explain two advantages of operating as a limited company instead of as a partnership.

(b)[1]

Calculate the cash received from the issue of shares on 30 June 2024.

(c)[2]

Calculate the overall interim dividend paid on 31 March 2024.

(d)[4]

Calculate the profit from operations for the year ending 31 December 2024.

(e)[4]

Prepare the retained earnings account for the year ending 31 December 2024.

Worked solution & mark scheme

This 15-mark question has a full step-by-step worked solution and mark scheme. One marking point: Limited liability safeguards shareholders’ personal assets

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