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The company Alpha has issued 1,000,000 ordinary shares worth 10c each and 500,000 preference shares worth 50c each. For the year ended October 31, 2002, Alpha paid the preference share dividend for the year and an interim dividend of 2c per ordinary share. A final ordinary dividend of 3c per share is also proposed. The total amount of dividends relating to this year is $130,000.

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30 views

Company

The company Alpha has issued 1,000,000 ordinary shares worth 10c each and 500,000 preference shares worth 50c each. For the year ended October 31, 2002, Alpha paid the preference share dividend for the year and an interim dividend of 2c per ordinary share. A final ordinary dividend of 3c per share is also proposed. The total amount of dividends relating to this year is $130,000.

Uploaded by

husse fok
Copyright
© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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The issued share capital of Alpha, a limited liability company, is as follows:

$
Ordinary shares of 10c each 1,000,000
8% Preference shares of 50c each 500,000
In the year ended 31 October 2002, the company has paid the preference dividend for the year and an interim
dividend of 2c per share on the ordinary shares. A final ordinary dividend of 3c per share is proposed.
What is the total amount of dividends relating to the year ended 31 October 2002?
A $580,000
B $90,000
C $130,000
D $540,000
16 When a company makes a rights issue of equity shares which of the following effects will the issue have?
(1) Working capital is increased
(2) Gearing ratio is increased
(3) Share premium account is reduced
(4) Investments are increased
A (1) only
B (1) and (2)
C (3) only
D (1) and (4)
17 Which of the following items may appear as current liabilities in a company’s balance sheet?
(1) Minority interests in subsidiaries.
(2) Loan due for repayment within one year.
(3) Taxation.
(4) Preference dividend payable
A (1), (2) and (3)
B (1), (2) and (4)
C (1), (3) and (4)
D (2), (3) and (4)
What is the correct treatment of extraordinary items in a company’s income statement, according to IAS8
Net
Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies?
A Add to or subtract from profit after tax.
B Include in calculating profit from operations with an explanatory note.
C Show separately in the income statement as part of profit from operations with an explanatory note.
D Exclude from income statement and disclose by note.
19 A company made an issue for cash of 1,000,000 50c shares at a premium of 30c per share.
Which of the following journal entries correctly records the issue?
Debit Credit
$$
A Share capital 500,000
Share premium 300,000
Bank 800,000
B Bank 800,000
Share capital 500,000
Share premium 300,000
C Bank 1,300,000
Share capital 1,000,000
Share premium 300,000
D Share capital 1,000,000
Share premium 300,000
Bank 1,300,000
Which of the following might appear as an item in a company’s statement of changes in equity?
(1) Profit on disposal of properties.
(2) Surplus on revaluation of properties
(3) Equity dividends proposed after the balance sheet date.
(4) Issue of share capital.
A (1), (3) and (4) only
B (2) and (4) only
C (1) and (2) only
D (3) and (4) only
Which one of the following would help a company with high gearing to reduce its gearing ratio?
A Making a rights issue of equity shares.
B Issuing further long-term loan notes.
C Making a bonus issue of shares.
D Paying dividends on its equity shares.

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