Accounting Multiple Choice Question – 15 January 2023

A company’s SOFP shows the following information:

£1 ordinary shares – £500k
Retained earnings – £400k
10% debentures – £300k
Total Capital Employed & Net Assets – £1,200k

A fully subscribed 1 for 4 rights issue at £2 per share is made and 50 % of the debentures are repaid at par.

What are the net assets following these changes?

Select ONE answer:

1. £1,100k
2. £1,175k
3. £1,225k
4. £1,300k

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct = £1,200 – (£300k / 2) + (500k / 4 * £2) = = > £1,300k

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