A-LevelAccountingPreparation of financial statements9706/12 · May/June 2016 · Q161 Mark

A company has 1000000 ordinary shares of $1 issued at $2.50. It also has a 5% debenture of $300000. Profit from operations for the year was $465000. The directors paid an 8% ordinary share dividend during the year. By which amount did the retained earnings increase during the year?

A$250000

B$370000

C$385000

D$400000

✓ Correct answer

B: $370000

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Topic: Preparation of financial statements, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2016 Paper 1 Variant 2, question 16.

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