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Accounting Revision Material

  • Date Submitted: 11/14/2011 07:30 AM
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FINAL EXAMINATION

REVISION PACKAGE

QUESTIONS

SHAREHOLDERS’ EQUITY

1. Trans Ltd
2.   Transformers Ltd

IMPAIRMENT
3.   Fiery Ltd
4.   Reacher Ltd

BUSINESS COMBINATIONS

5. Jade Ltd – Stone Ltd
6. Edam Ltd – Gouda Ltd – Colby Ltd

CONSOLIDATED FINANCIAL STATEMENTS

7. Huggy Ltd – Bear Ltd
8. Sparrow Ltd – Wren Ltd
9. Sophie Ltd – Marceau Ltd
10. Running Ltd – Bear Ltd
11. Aquarius Ltd – Virgo Ltd

LEASES

12. Concrete Constructions Ltd & Amazon Finance Ltd

QUESTION 1:
Trans Ltd’s equity as at 30 June 2008 was as follows:

120,000 ordinary A shares, issued @ $1.10, fully paid $132,000
150,000 ordinary B shares, issued @ $1.20, called to 70c 105,000
100,000 8% cumulative preference shares, issued @ $1, fully paid 100,000
Calls in advance (30,000 shares) 15,000
Share issue costs (11,200)
General reserve 160,000
Retained earnings 158,000
Total equity $658,800

The general journal is used for all entries, and the books are balanced 6-monthly (each 31 December and 30 June).
The following events occurred after 30 June 2008:
2008
30/09 The final 10c per share ordinary dividend and the preference dividend, both declared on 25 June 2008, were paid. Shareholder approval is not required for payment of dividends.

31/10 A prospectus was issued inviting offers to acquire 1 option for every 2 ordinary A shares held at a price of 80c per option, payable by 30 November 2008. Each option entitles the holder to 1 ordinary A share at a price of 70c per share and are exercisable in November 2010. Any options not exercised by 30 November 2010 will lapse.

30/11 Offers and monies were received for 50,000 options, and these were issued.

2009
15/01 The final call on ordinary B shares was made, payable by 15 February 2009.

15/02 All call monies were received.

20/04 50,000 preference shares were repurchased at $1.10 per share. The repurchase was accounted for by writing down preference share capital by $50,000 and...

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