Accounting Multiple Choice Question – 25 August 2021

Lucy Limited’s balance sheet at 31 December is as follows:

The share premium account arose on the issue of the ordinary shares.

The preference shares are now redeemed at a premium of 20%. 

What will be the balance on the Capital Redemption Reserve after this transaction?

Select ONE answer:

1. NIL
2. £1,900
3. £2,000
4. £2,400

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

1. Not correct
2. Not correct
3. Correct
4. Not correct

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