A-LevelAccountingCompany Accounts / Share Capital and ReservesMay/June 2020Paper 1 Q161 Mark
On 1 December 2019 a company's statement of financial position included the following. [Table with 'ordinary shares of $5 each' $2500000, 'share premium' $850000, 'retained earnings' $710000] 2019 15 December paid an ordinary share interim dividend of $0.15 per share 23 December made a bonus issue of 25000 ordinary shares Reserves were kept in their most flexible form. What were the balances on the revenue reserves and capital reserves accounts after these transactions?
Arevenue reserves $335000, capital reserves $725000
Brevenue reserves $335000, capital reserves $825000
Crevenue reserves $635000, capital reserves $725000
Drevenue reserves $635000, capital reserves $825000
✓ Correct Answer
The correct answer is C: revenue reserves $635000, capital reserves $725000
📋 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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