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

Preparation of financial statements — practice question

The following information was given by a company for the financial year ending 31 December. In that year, a bonus issue of one ordinary share for every five ordinary shares was carried out. The company’s policy is to retain its reserves in the most flexible form. During the year, a dividend of $\$0.15$ per share was paid on all ordinary shares held on 1 January. What was the profit for the year?

  • A$\$115\,000$
  • B$\$140\,000$
  • C$\$165\,000$
  • D$\$190\,000$

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