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

Preparation of financial statements — practice question

Ben and George changed their partnership into a limited company, M Limited.

(a)[4]

Explain two benefits of being a limited company instead of a partnership.

(b)[1]

Calculate the amount raised from issuing shares on 30 June 2024.

(c)[2]

Calculate the total interim dividend paid on 31 March 2024.

(d)[4]

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

(e)[4]

Prepare the retained earnings account covering the year ended 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: “Shareholders benefit from limited liability” …