At the start of the year a limited company's equity was as follows.

$

ordinary shares of $1 each
200 000
retained earnings
120 000

During the year the following took place.

1 Non-current assets were revalued upwards by $70000.
2 An interim dividend of $30000 was paid.
3 A 10% debenture (2030) of $10000 was issued.

The profit for the year was $80000.

What was the total equity at the end of the year?

This question tests Company Accounts in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

This question appeared in the Cambridge A-Level Accounting May/June 2021 examination, Paper 1 Variant 2 (9706_s21_qp_12.pdf).

Question

At the start of the year a limited company's equity was as follows.

$

ordinary shares of $1 each
200 000
retained earnings
120 000

During the year the following took place.

1 Non-current assets were revalued upwards by $70000.
2 An interim dividend of $30000 was paid.
3 A 10% debenture (2030) of $10000 was issued.

The profit for the year was $80000.

What was the total equity at the end of the year?

Oracle Prep · Accepted Answer

The correct answer is C: $440 000.

✓ Correct Answer