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

Preparation of financial statements — practice question

At 1 January, a company possessed 300000 ordinary shares of $1 each and a 10% bank loan of $100000. On 1 July, the company issued a 6% debenture of $800000. For the year ending 31 December, profit from operations was $120000. During the year, the company paid a dividend of $0.05 per ordinary share. What was the profit for the year ended 31 December?

  • A$71000
  • B$86000
  • C$96000
  • D$110000

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