Chap 11: Company financial statement

1.               A company's share capital consists of 20,000 25p equity shares all of which were issued at a premium of 20%. The market value of the shares is currently 70p each. What is the balance on the company's equity share capital account?

• A £5,000

• B £6,000

• C £14,000

• D £24,000

1.               Which of the following may appear as current liabilities in a company's statement of financial position?

1 Loan due for repayment within one year

2 Taxation

3 Warranty provision

• A 1,2 and 3

• B 1 and 2 only

• C 1 and 3 only

• D 2 and 3 only

1.               At 30 June 20X5 Meredith plc had the following balances:

 

£

Equity shares of £1 each

100

Share premium

80

During the year ended 30 June 20X6, the following transactions took place:

1 September 20X5: A 1 for 2 bonus issue of equity shares, using the share premium.

1 January 20X6: A 2 for 5 rights issue at £1.50 per share, taken up fully paid.

What are the balances on each account at 30 June 20X6?

 

Share capital Share premium

• A 210 110

• B 210 60

• C 240 30

• D 240 80

1.               Klaxon plc issued, for cash, 1,000,000 50p shares at a premium of 30p per share. Which of the following journals correctly records the share issue?

• A Debit Share capital £500,000, Debit Share premium £300,000, Credit Cash at bank £800,000

• B Debit Cash at bank £800,000, Credit Share capital £500,000, Credit Share premium £300,000

• C Debit Cash at bank £1,300,000, Credit Share capital £1,000,000, Credit Share premium 300,000

• D Debit Share capital £1,000,000, Debit Share premium £300,000, Credit Cash at bank £1,300,000

1.               Sanders plc issued 50,000 equity shares of 25p each at a premium of 50p per share. The cash received was correctly recorded but the full amount was credited to the share capital account. Which of the following journals corrects this error?

• A Debit Share premium £25,000, Credit Share capital £25,000

• B Debit Share capital £25,000, Credit Share premium £25,000

• C Debit Share capital £37,500, Credit Share premium £37,500

• D Debit Share capital £25,000, Credit Cash at bank £25,000

1.               Which of the following journals correctly records a bonus issue of shares?

• A Debit Cash at bank, Credit Share capital

• B Debit Share capital, Credit Share premium

• C. Debit Share premium, Credit Share capital

• D. Debit Investments, Credit Cash at bank

. At 31 December 20X1 the capital structure of a company was as follows

 

£

100,000 equity shares of 50p each 50,000

Share premium 180,000

During 20X2 the company made a 1 for 2 bonus issue, using the share premium for the purpose, and later issued for cash another 60,000 shares at 80p per share.

What is the company's capital structure at 31 December 20X2?

 

Equity share capital Share premium

• A £130,000 £173,000

• B £105,000 £173,000

• C £130,000 £137,000

• D £105,000 £137,000

8. Evon plc issued 1,000,000 equity shares of 25p each at a price of £1,10 per share, all received in cash. Which of the following journals records this issue?

• A. Debit Cash at bank £1,100,000, Credit Share capital £250,000, Credit Share £850,000 premium

• B. Debit Share capital £250,000, Debit Share premium £850,000, Credit Cash at bank £1,100,000

• C. Debit Cash at bank £1,100,000, Credit Share capital £1,100,000

• D. Debit Cash at bank £1,100,000, Credit Share capital £250,000, Credit Retained earnings £850,000

8.               In the year to 31 March 20X2 Kable had the following capital structure:

200,000 equity shares of 25p each 50,000

Share premium 70,000

On 15 March Kable paid an equity dividend of 15p per share.

What is the total dividend paid by Kable?

• A. £7,500

• B. £30,000

• C. £50,000

• D £72,000

10. Afua plc sells small electrical items, It has a vear end date of 31 December 20X7. On 28 December it accepted an order from a credit customer for 100 toasters at a price of £35 per toaster. On 30 December, Afua plc dispatched 60 toasters to the customer but they were not received by the customer until 1 January 20X8. Afua plc remains responsible for the goods until they are delivered to the customer. The remaining 40 toasters were on 2 January 20X8 and received by the customer on 4 January 20X8.

How much revenue should Afua plc recognise in respect of the sale of toasters in the year ended 31 December 20X7?

• A. £3,500

• B. £2,100

• C. £1,400

• D. Nill