You are required to answer the following five questions:

(a) The share capital of Fogarino Ltd consists of 250,000 fully-paid ordinary (or ‘equity’) shares of 10 pence each, all of which were issued at a premium of 30 pence per share. The current market value of the company’s shares is 95 pence each. What is the balance on the share capital account of this company?

(b) Heidinga Ltd reported a profit after tax of £2.8m for its financial year ended 31 October 2024.

During the year, the company paid ordinary dividends of £1.1m and made a transfer to general reserve of £0.5m. If the closing balance of retained earnings at 31 October 2024 was £34.3m, what was the opening balance as at 1 November 2023?

(c) Ashwar Ltd issued 75,000 ordinary shares of 50p each at a price of £1.20 per share, fully paid. The debit entry to cash at bank was correctly recorded but the total amount received was credited to the share capital account. What double entry is required to correct this error?

(d) Sheldy plc has always recorded its freehold land at its historical cost of £115,000. The company has recently had its land valued by a professional firm of specialist valuers, and they have advised that the land is now worth £395,000. The directors propose to include this current valuation in the financial statements. What double entry would be required to record this?

(e) The following balances have been extracted from the balance sheet of Coleman plc as at 30 April 2022:

During the year ended 30 April 2023, the following transactions took place:
• On 18 August 2022, there was a 1-for-3 bonus issue of ordinary shares, using the share premium account.
• On 24 February 2023, there was a 3-for-10 rights issue of ordinary shares at 250p per share, taken-up fully paid.
What are the balances on Coleman plc’s share capital and share premium accounts as at 30 April 2023?

Transcribed Image Text:

Share capital (ordinary shares of 1 each) Share premium m 60 145