Day: August 16, 2024

Accounting Multiple Choice Question – 16 August 2024

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Olya Kobruseva on Pexels.com

At the 30 June 2022, the capital structure of Alex plc was as follows:At the 1 April 2023, the capital structure of Alex plc was as follows:

  • 300,000 equity ordinary shares of 25p each  £75,000
  • Share premium account  £200,000

In the year ended 31 March 2024 the following events took place:

  • 1 October 2023 – the company made a 1 for 5 rights issue at £1.20 per share and this was taken up in full.
  • 1 January 2024 – the company made a 1 for 3 bonus issue, using the share premium account for the purpose of the issue.

What was the company’s share capital as at the 31 March 2024?

Select ONE answer:

  1. £90k
  2. £120k
  3. £360k
  4. £480k

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. Notcorrect
  2. Correct ==> Share Capital is £75k + (Rights issue 60,000 * £0.25p = £15k) + (Bonus issue 360,000 / 3 * £0.25p = £30k) ==> £120k
  3. Not correct
  4. Not correct

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