P Limited sells electronic goods online.

The directors provided the following information.

Balances	At 31 July 2023	At August
8% debenture (2026)	36000	-
Inventory	43190	36800
Other payables: administrative expenses	-	960
Other receivables: administrative expenses	160	1820
Other receivables: distribution costs	1490	-
Trade payables	25250	29610

Bank account extract for the year ended 31 July 2023

	Dollar
Payments
To credit suppliers	122050
Administrative expenses	66920
Distribution costs	51730
Receipts
From customers	284200

The following information is also available:

All goods are despatched to customers immediately on receipt of payment.

Inventory at 31 July 2023 included damaged items that had cost $3600. One half of these items will be scrapped and have no value. The remaining items will be sold for $900 after repairs costing $420.

The 8% debenture (2026) was issued on 1 April 2023.

The charge for taxation was estimated to be $10700.

(a) Prepare the statement of profit or loss for the year ended 31 July 2023. Use the space provided to show your workings.

P Limited

Statement of profit or loss for the year ended 31 July 2023

	Dollars

Balances at 1 August 2022

Additional information

	dollar
Share capital(ordinary shares of 0.5 dollar each)	120000
Share premium	19000
Retained earnings	23560

On 1 September 2022, a bonus issue of shares was made of one ordinary share for every six shares held. Reserves were maintained in their most flexible form.

On 1 January 2023, a final dividend of $0.07 per share was paid on all shares in issu

1 August 2022.

On 31 March 2023, a rights issue of one ordinary share for every four shares held was made at a premium of $0. 15 per share. The issue was fully subscribed.

(b) Prepare the statement of changes in equity for the year ended 31 July 2023.

P Limited

Statement of changes in equity for the year ended 31 July 2023

	Share capital	Share premium	Retained earnings	total
At 1 August 2022	120000	19000	23560	162560

(c) State two examples of revenue reserves of a limited company.

(d) Advise the directors whether or not they were correct to make a bonus issue of shares rather than make a new issue of shares. Justify your answer.

(a) Prepare the statement of profit or loss for the year ended 31 July 2023. Use the space provided to show your workings. P Limited Statement of profit or loss for the year ended 31 July 2023 a) Advise the directors whether or not they were correct to make a bonus issue of shares rather than make a new issue of shares. Justify your answer. 1 P Limited selis electronic goods online. The directors provided the following information. Bank account extract for the year ended 31 July 2023 The following information is also available. 1 All goods are despatched to customers immediately on receipt of payment. 2 Inventory at 31 July 2023 included damaged items that had cost $3600. One ha items will be scrapped and have no value. The remaining items will be sold for repairs costing $420. 3 The 8\% debenture (2026) was issued on 1 April 2023. 4 The charge for taxation was estimated to be $10700. 1 Balances at 1 August 2022 2 On 1 September 2022, a bonus issue of shares was made of one ordinary share for every six shares held. Reserves were maintained in their most flexible form. 3 On 1 January 2023, a final dividend of $0.07 per share was paid on all shares in issue at 1 August 2022. 4 On 31 March 2023, a rights issue of one ordinary share for every four shares held was made at a premium of $0.15 per share. The issue was fully subscribed. (b) Prepare the statement of changes in equity for the year ended 31 July 2023. P Limited Statement of changes in equity for the year ended 31 July 2023 [6] (c) State two examples of revenue reserves of a limited company. 1 2 [2]