1. Which of the following statement is true of preference shares? (2 marks) A. The dividend for preference shares must be paid after the ordinary dividend is paid. B. Preference shares are a part of the equity capital of the company C. In the event of the liquidation of the company, preference shareholders will be paid off first. D. All of the above are true.

2. KAM Ltd has 8,900 trade receivables at 31 December 2020. The company accountant has been told that 700 of its trade receivables are not collectable. It is the policy of the company maintains an allowance for doubtful debt equivalent to 5% of the trade receivables at the end of the year. You are required to calculate the allowance for doubtful debt for the year to 31 December 202. Show all your calculation. (3 marks)