A-LevelAccountingCompany Accounts (Share Capital & Reserves)May/June 2017Paper 1 Q161 Mark
A company's equity is made up as shown. $ 100000 ordinary shares of $0.25 each 25000 share premium 3000 retained earnings 8000 The following took place. 1 A bonus issue of one ordinary share for every five held was made. 2 Six months later a rights issue of one ordinary share for every four held was made. The shares were issued at $0.30 each. By how much did the company's equity increase as a result of these transactions?
A$5000
B$6000
C$7500
D$9000
✓ Correct Answer
The correct answer is D. This question tests the candidate's understanding of company accounts (share capital & reserves) within the Accountingsyllabus. The examiner's mark scheme requires...
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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...
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