A-LevelAccountingPreparation of financial statements9706/12 · May/June 2025 · Q201 Mark
The table shows a company's equity. ordinary shares of $1.00 each $200 000 share premium account $80 000 revenue reserves $160 000 Changes now to be made to the equity (in the order given) are as follows: • a one-for-one bonus issue of ordinary shares • a rights issue of 100000 ordinary shares of $1.00 each at $1.40 per share. The company wishes to maintain reserves in the most flexible form. What will be the equity of the company?
Aordinary share capital: $500 000, share premium: $40 000, revenue reserves: $40000
Bordinary share capital: $500 000, share premium: $80 000, revenue reserves: nil
Cordinary share capital: $540 000, share premium: nil, revenue reserves: $40000
Dordinary share capital: $540 000, share premium: $40 000, revenue reserves: $40000
✓ Correct answer
A: ordinary share capital: $500 000, share premium: $40 000, revenue reserves: $40000
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