Question 2 1 Point Bobby Limited issued 10 000 share options to subscribe for ordinary shares. The exercise price on the options was $3 per share. If all options were exercised on due date the following journal entry would be recorded: Share options reserve Dr 30 000 Cash Cr 30 000 Share capital. Ordinary Dr 30 000 B Cash Cr 30 000 Share options - Ordinary Dr 30 000 Share capital - Ordinary cr 30 000 Cash Dr 30 000 Share capital - Ordinary Cr 30 000 Question 3 Replaceable rules deal with: 1. The appointment, powers and remuneration of directors. 2. Director's and member's meetings. 3. Share transfers. 4. Inspection of the company's books by members. A) 1, II and III only. B) I and IV only I ll and ill only D) 1, 11. III and IV Ruestion 4 A declaration of solvency is required to be signed by the directors of the company in order for A) the liquidation to proceed as a members' voluntary winding up. (B) the company to borrow more money from a bank. the court to make an order for liquidation. D the company to issue more shares to its shareholders. Question 5 The costs of issuing equity effectively means that: A a deferred asset is recognised and carried forward in the balance sheet. B the proceeds from the equity issue are reduced the underwriters of the equity issue bear additional costs the proceeds from the equity issue are increased Question 6 According to the AASBs Conceptual Framework an asset is: A a contingent item depending on another event occurs at some time in the future (B) a future benefits controlled by an entity as the result of a future transaction an item that has a physical existence and can be converted into cash. a future benefit controlled by an entity as the result of past transactions or events