Day: September 5, 2024

Alex plc has share capital of 300,000 £1 (face value) shares as at 1 March 223. These 300,000 shares were issued at a price of £1.50
per share.

On 28 February 2024 Alex pic made a 2 for 3 bonus issue.

Before accounting for this the balance on the retained earnings reserve as at 28 February 2024 was £717,000.

In its statement of financial position as at 28 February 2024 the balance on Alex plc’s retained earnings reserve will be?

Select ONE answer:

1. £517,000
2. £567,000
3. £667,000
4. £717,000

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 3

1. Not correct
2. Not correct
3. Correct – £717,000 – £50k (balance of Bonus issue of £200,000, remaining £150K taken from share reserve).
4. Not correct

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