Canada Ltds balance sheet for the financial year is given below:

Current assets	$70 000
Non-current assets	160 000
Current liabilities	32 500
Non-current liabilities	59 500
Share capital	50 000
Retained earnings	88 000

The equity ratio is:

Select one:

a. 43%.

b. 60%.

c. 66%.

d. 40%.

e. None of the options

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Canada Ltd issued 10 000 shares with an issue price of $1.50 on which the full price has been paid to the company. The maximum additional amount the shareholders can be asked to contribute if the company cannot pay its debts is:

Select one:

a. Nil

b. $1.50 - 50c per share or $5 000

c. $1.50 per share or $15 000

d. There is no limit on the amount the shareholders can be asked to contribute.

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Canada Ltd was incorporated on 1 January 2018 and on that date issued:

5% Preference shares	for $1	4 000 shares
Ordinary shares	for $10	5 000 shares

During December 2020 Canada Ltd declared a total of $ 2 500 in dividends. This was the first dividend declared by Canada Ltd, that is, no dividends were declared since the date of incorporation. If the preference shares are cumulative, the total amount of the $2 500 dividend that will be available for payment to the ordinary shareholders is:

Select one:

a. $2 500.

b. $2 000.

c. $2 300.

d. None of the options

e. $1 900.

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Canada Ltd has the following summary balance sheet at year-end.

Current assets	$350 000
Non-current assets	500 000
Current liabilities	50 000
Non-current liabilities	150 000
Share capital	300 000
Retained earnings	350 000

The debt ratio at year-end is:

Select one:

a. None of the options

b. 17.6%.

c. 76.5 %.

d. 23.5 %.

e. 40 %.

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What is the basic journal entry to create a general reserve?

Select one:

a. Dr Retained earnings, Cr General reserve

b. Dr Income, Cr General reserve

c. Dr General reserve, Cr Retained earnings

d. Dr Profit or loss summary, Cr General reserve