On 5 March 20X7, Marchant Ltd issued 200,000 5% irredeemable GHS 1 preference shares. In accordance with IAS 32 Financial Instruments: Presentation, how will these shares and their related dividend be shown in Marchant Ltd’s financial statements for the year ended 31 March 20X7?

On 5 March 20X7, Marchant Ltd issued 200,000 5% irredeemable GHS 1 preference shares. In accordance with IAS 32 Financial Instruments: Presentation, how will these shares and their related dividend be shown in Marchant Ltd’s financial statements for the year ended 31 March 20X7?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Question

On 5 March 20X7, Marchant Ltd issued 200,000 5% irredeemable GHS 1 preference shares.

In accordance with IAS 32 Financial Instruments: Presentation, how will these shares and their related dividend be shown in Marchant Ltd’s financial statements for the year ended 31 March 20X7?

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

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