The chief accountant of Corchester had prepared the following balances at 1July 1994: Freehold property $ 100000 Other fixed asset 480 000 Current asset (including bank) 440 000 Less current liabilities (200 000) Financed by: Issued and paid up share capital: 400 000 ordinary shares of $1 each 400 000 150 000 8% redeemable preference shares of $1 each 150 000 Reserves: Capital redemption reserve 100 000 Share premium account 50 000 General Reserves 45 000 Profit and loss account 75 000 The directors had decided to carry out the following transactions on August 1994: 8 July 1994 , A rights issue of one ordinary share for 4 already held. All shareholders took up their rights. 1 August 1994, A bonus issue was made of one ordinary share for 10 held based on the revised ordinary share capital This was carried with equal amounts from the revenue reserve. 5 August 1994, 40 000 preference shares were redeemed at a 5 cents per share .This was achieved out of profits with the exception of one which was which was covered by the share premium account. 15 August 1994, The freehold property was revalued at 130 000. 19 August 1994 , fixed asset costing 10 000 were purchased. Required: A balance sheet as at 19 August 1994 after the completion of all transactions indicated above.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The chief accountant of Corchester had prepared the following balances at 1July 1994: Freehold property $ 100000 Other fixed asset 480 000 Current asset (including bank) 440 000 Less current liabilities (200 000) Financed by: Issued and paid up share capital: 400 000 ordinary shares of $1 each 400 000 150 000 8% redeemable preference shares of $1 each 150 000 Reserves: Capital redemption reserve 100 000 Share premium account 50 000 General Reserves 45 000 Profit and loss account 75 000 The directors had decided to carry out the following transactions on August 1994: 8 July 1994 , A rights issue of one ordinary share for 4 already held. All shareholders took up their rights. 1 August 1994, A bonus issue was made of one ordinary share for 10 held based on the revised ordinary share capital This was carried with equal amounts from the revenue reserve. 5 August 1994, 40 000 preference shares were redeemed at a 5 cents per share .This was achieved out of profits with the exception of one which was which was covered by the share premium account. 15 August 1994, The freehold property was revalued at 130 000. 19 August 1994 , fixed asset costing 10 000 were purchased. Required: A balance sheet as at 19 August 1994 after the completion of all transactions indicated above.

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