A-LevelAccountingCompany Accounts (Shares, Debentures, Reserves, Dividends)Oct/Nov 2021Paper 1 Q161 Mark
A company's statement of financial position at 1 January 2020 included the following amounts. $Ordinary shares of $5 each: 800 000 General reserve: 80 000 Retained earnings: 120 000 The following transactions took place during the year ended 31 December 2020. 1 The company issued a further 50000 ordinary shares at a premium of $1 per share. 2 The company's land was revalued upwards by $130 000. 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?
A140000 (revenue), 180 000 (capital)
B190000 (revenue), 130000 (capital)
C200 000 (revenue), 180 000 (capital)
D250 000 (revenue), 130000 (capital)
✓ Correct Answer
The correct answer is A: 140000 (revenue), 180 000 (capital)
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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