Accounting Multiple Choice Question – 27 July 2022

A company with an issued share capital of £200 000 of £1.00 ordinary shares makes a bonus issue of one £1.00 ordinary share for every five already held.

It also issues £80 000 debentures at a discount of 5%.

The company has a bank balance of £40 000 before the issues.

What is the bank balance after the issues?

Select ONE answer:

1. £76 000
2. £116 000
3. £120 000
4. £166 000

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 2

1. Not correct
2. Correct ==> £40,000 + £80,000 * 0.95
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.