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

Preparation of financial statements — practice question

A company gave the information below. On 1 January: $100000 ordinary shares of $1 each $95000 retained earnings In the year ended 31 December, the following transactions took place. 1 A bonus issue was made, giving one ordinary share for every two ordinary shares owned on 1 January. 2 A rights issue of $50000 ordinary shares at $1.25 each was made. The issue was fully subscribed. 3 $25000 was transferred to establish a general reserve. 4 A dividend of $11250 was paid. Profit for the year ended 31 December amounted to $68500. Calculate the total shareholders’ equity at 31 December.

  • A$289750
  • B$314750
  • C$364750
  • D$389750

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