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

Preparation of financial statements — practice question

A company’s statement of financial position on 1 January 2020 showed these figures. During the year ending 31 December 2020, the following transactions occurred. 1 The company issued an additional 50000 ordinary shares at a premium of $1 per share. 2 The company’s land was revalued upwards by $130000. 3 The company paid a final dividend of $60000. What were the total revenue reserves and capital reserves at 31 December 2020 after these three transactions?

  • Atotal revenue reserves $140000, total capital reserves $180000
  • Btotal revenue reserves $190000, total capital reserves $130000
  • Ctotal revenue reserves $200000, total capital reserves $180000
  • Dtotal revenue reserves $250000, total capital reserves $130000

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