A-LevelAccountingLimited CompaniesOct/Nov 2010Paper 1 Q201 Mark
A company's share capital and reserves are: [Table showing non current (fixed) assets $250 000, net current assets $125 000, total $375 000; and share capital and reserves breakdown: 150 000 shares $1 each $150 000, share premium $75 000, general reserve $125 000, profits retained $25 000, total $375 000] The directors propose to issue bonus shares on the basis of one $1 share for every three already held. Following this the directors intend to make a rights issue on the basis of one new $1 share for every four shares held, at a premium of $0.20 per share. What will the total net assets of the company be after the share issues?
A$425 000
B$435 000
C$475 000
D$485 000
✓ Correct Answer
The correct answer is B: $435 000
📋 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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