=+1.* A business friend of yours who does not know much about accountancy has a holding of 1,000 ordinary shares in a pubhc company and asks you to explain certain points in connection with the company's last balance sheet, a copy of which he has just received. The following is a summarised copy of the balance sheet in question.

Capital issued and fully paid:

200,000 7% Cum. Pref.

1,000s of £s Shares of £1 200 2,000,000 Ordinary Shares of 5/- 500 Debentures 250 Capital Reserves 300