Nov2013/P43/Q2: © UCLES 2013 9706/43/O/N/13
Nov2013/P43/Q2: © UCLES 2013 9706/43/O/N/13
Nov2013/P43/Q2: © UCLES 2013 9706/43/O/N/13
2 On 1 July 2011 Voronez plc issued 120 000 ordinary shares of $1 each at a premium of $0.10
per share and 40 000 5% redeemable preference shares of $1 each at a premium of $0.15 per
share.
The company made a profit for the year ended 30 June 2012 of $100 000.
1 paid the dividend on the redeemable preference shares (treated as a financing cost);
3 made a bonus issue of one new fully paid ordinary share for every 4 shares held;
4 made a rights issue of one new ordinary share for every 6 shares held after the bonus
issue at a price of $1.60 per share. The rights issue was fully subscribed.
REQUIRED
(a) Calculate the amounts which will be included in the company’s statement of financial position
at 30 June 2012 for each of the following:
Share premium,
Additional information
The company made a profit for the year ended 30 June 2013 of $86 000 before paying any
dividends.
2 purchased 80 000 of its own ordinary shares at a price of $1.125 each and cancelled
them.
REQUIRED
(b) Calculate the amounts which will be included in the company’s statement of financial position
at 30 June 2013 for each of the following:
Share premium,
(c) Explain the circumstances in which the directors of a company would be unable to pay a
dividend on ordinary shares. [5]
(d) (i) State one reason why a capital redemption reserve is created. [2]
(ii) Explain the way in which you have created the capital redemption reserve. [2]
(iii) State for what purposes a capital redemption reserve may be used. [2]
[Total: 40]