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The information shows the capital and reserves of a company according to its last published accounts.
- ordinary shares of £1.00 each – £ 200,000
- redeemable preference shares of £1.00 each – £50,000
- Profit and Loss Account – £68,000
The redeemable preference shares were originally issued at par. They have now been redeemed at a premium of 25 %.
A new issue of 50 000 ordinary shares of £1.00 was made at a premium of £0.15 per share to finance the redemptions.
What will be the balance on the Share Premium account and Profit and Loss Account after the share redemption?
Select ONE answer:
![](https://multiplechoicequestions.blog/wp-content/uploads/2020/12/table-99.jpg?w=840)
Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 3
- Not correct
- Not correct
- Correct -50,000 * £0.15 = £7,500 + £68,000 – (50,000 *0.25)
- Not correct
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