Harland Ltd had the following balances in its accounts after the calculation of the profit for the year (net profit) ended 31 October 2010: $ Called up share capital: 4% $1 Cumulative preference shares 200 000 $1 Ordinary shares 400 000 Non-current (fixed) assets 700 000 6% Debentures 100 000 Inventory (stock) 55 000 Trade payables (creditors) 50 000 Trade receivables (debtors) 105 000 Profit (net profit) for the year ended 31 October 2010 65 000 Profit and loss account (retained profit) 1 November 2009 75 000 General reserve 110 000 Bank 40 000 Dr Interim preference dividend paid 5 000 Additional information 1 Authorised share capital: $ 4% $1 Cumulative preference shares 250 000 $1 Ordinary shares 500 000 2 The directors have decided to: Transfer $25 000 to the general reserve. Pay the remainder of the cumulative preference share dividend for the year. An interim dividend of 2½% was paid on 30 April 2010. Pay a $0.05 final dividend on the ordinary shares. No interim dividend had been paid.

1. (a)Prepare the appropriation account for Harland Ltd for the year ended 31 October 2010. Harland Ltd Appropriation Account for the year ended 31 October 2010[6]
2. (b)Prepare the balance sheet extract for the shareholders' funds (capital and reserves) of Harland Ltd at 31 October 2010. Harland Ltd Extract from Balance Sheet at 31 October 2010[5]
3. (c)State the amount of the capital employed by Harland Ltd at 31 October 2010.[1]
4. (d)Explain the difference between preference shares and cumulative preference shares.[2]
5. (e)State one difference between ordinary shares and debentures.[2]
6. (f)(i)Explain two benefits of international accounting standards.[2]
7. (g)Explain the term capital expenditure.[2]
8. (h)In the table below, place a tick (✔) under the correct heading to indicate which of the following is capital expenditure or revenue expenditure. Capital expenditure Revenue expenditure Advertising campaign A new computer system Purchase of computer CDs[3]