Tag: rights issue

On 1 January 2023 Alex plc has £300,000 of 50p equity shares in issue, and a balance on the share premium account of £750,000.

On 1 April 2023, the company makes a 1 for 3 bonus issue.

The balance on Alex plc’s share premium account as at 31 December 2023 is?

Select ONE answer:

1. £450,000
2. £550,000
3. £650,000
4. £850,000

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 – £0.50 face value * 600,000 shares == > 1/3 Bonus issue = 200,000 shares * £0.50 = £100k == > Dr Share Premium £100k Cr Share Capital £100k == > Share Premium now £650k
4. Not correct

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Alex plc is preparing its financial statements for the year ended 30 June 2024. Its initial trial balance shows the following balances:

• Accruals as at 1 July 2023 £948
• Distribution costs paid via the bank £130,647

Of the accruals as at 1 July 2023, £586 related to distribution costs.

As at 30 June 2024 the equivalent figure for distribution costs is £654.

In Alex plc’s Income Statement, the figure for the year-ended 30 June 2024 for distribution costs is?

Select ONE answer:

1. £129,407
2. £130,579
3. £130,715
4. £131,887

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 – Dr Bank Payments £130,647 + Closing Accrual £654 – Cr Opening Accrual Reversed £586 = £130,715 I/S
4. Not correct

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

Which of the following statements, if any, are correct?

1 All non-current assets must be depreciated.

2 In a company’s published statement of financial position, tangible assets and intangible assets must be shown separately.

Select ONE answer:

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

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 ==> Land is usually not depreciated
3. Not correct
4. Not correct

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

Which of the following accounting treatments derive from the accounting concept of accruals / matching?

(1) Write down of a non-current asset which has suffered a fall in value
(2) Opening and closing inventory adjustments
(3) Capitalisation and amortisation of development expenditure

Select ONE answer:

1. (1) and (2)
2. (3) Only
3. (2) and (3)
4. (1) Only

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
4. Not correct

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

Alex plc is preparing its financial statements for the year ending 31 March 2024.

The initial trial balance has the following figures relating to tax:

Tax payable as at 1 April 2023 £14,300
Tax paid during the year ended 31 March 2024 £12,700

The estimated tax liability for the year ended 31 March 20247 is £15,600.

The figure for tax expense in Alex plc’s income statement will be?

Select ONE answer:

1. £12,700
2. £14,000
3. £17,200
4. £28,300

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 ==> Dr Cash £12,700 + Dr C/D Tax Liability £15,600 = Cr B/D Balance £14,400 + Income Statement (Bal Fig) £14,000
3. Not correct
4. Not correct

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