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

Preparation of financial statements — practice question

The equity of a limited company includes ordinary shares.
(a(i))[4]

Explain two reasons why a company may issue bonus shares.

(a(ii))[3]

State three uses of the share premium account, apart from the issue of bonus shares.

(b)[6]

Prepare the statement of changes in equity for the year ended 31 December 2017.

(c)[2]

State the journal entry needed to record a revaluation increase in the value of a non-current asset.

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