A-LevelAccountingCompanies (Financial Statements & Appropriation)May/June 2016Paper 1 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
The correct answer is B: $370000
📋 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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