The following information is available for a limited company for a financial year ended on 31 December.
$
total equity on 1 January 492 000
profit for the year 70500
dividends paid 24 000
dividends proposed 12000
On 30 June, there was a bonus issue of 20 000 ordinary shares of $1 each. On 31 December, the following decisions were made. 1 The buildings are to be revalued at $250000. These had cost $200000 and the accumulated depreciation was $50000. 2 There is to be a transfer of $5000 to the general reserve. What is the total equity on 31 December after these adjustments have been made?

Q: What topic does this question test?

This question tests Financial Statements of Limited Companies in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Q: Which exam paper is this question from?

This question appeared in the Cambridge A-Level Accounting Feb/Mar 2023 examination, Paper 1 Variant 2 (9706_m23_qp_12.pdf).

Question

The following information is available for a limited company for a financial year ended on 31 December. 
$ 
total equity on 1 January 492 000
profit for the year 70500
dividends paid 24 000
dividends proposed 12000
On 30 June, there was a bonus issue of 20 000 ordinary shares of $1 each. On 31 December, the following decisions were made. 1 The buildings are to be revalued at $250000. These had cost $200000 and the accumulated depreciation was $50000. 2 There is to be a transfer of $5000 to the general reserve. What is the total equity on 31 December after these adjustments have been made?

Oracle Prep · Accepted Answer

The correct answer is D: $638 500.

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