Day: February 14, 2023

The cash budget of Alex Limited for the next six months shows a cash deficiency of £30,000 arising at the end of the period.

Which possible remedy will overcome the deficiency?

Select ONE answer:

1. a rights issue to existing ordinary shareholders; the issue’s net proceeds will be £35,000
2. cancelling a planned depreciation charge of £38,000
3. delaying for one year a bonus issue to existing ordinary shareholders
4. the inclusion of the company’s freehold property in the accounts at its current valuation of £200,000 instead of cost of £128,000

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 1

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

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