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5 marksLimited Liability Companies

CSEC Principles of Accounts · January 2013 · Paper 2 · Question 7(a)(i)

MMC Company Ltd. has authorized share capital of 300 000 ordinary shares of 2 each and 100 000 6% preference shares of 3 each. On 1 January 2012, it issued 200 000 ordinary shares at 2.50 each and 80 000 6% preference shares at 3.25 each, fully subscribed.

Prepare the journal entry to record the issue of the shares.

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Other parts of this question

  1. 7(a)(ii)State ONE difference between ordinary shares and preference shares.[1 mark]
  2. 7(b)Prepare a statement of MMC Company Ltd's Profit and Loss Appropriation Account for the year ended 31 December 2012.[6 marks]
  3. 7(c)(i)a)Calculate the Return on the capital invested at 1 January 2012 for MMC Company Ltd.[2 marks]
  4. 7(c)(i)b)Calculate the Dividend rate (percentage) for ordinary shareholders for MMC Company Ltd.[4 marks]
  5. 7(c)(ii)Compare your calculated return on capital invested and ordinary dividend rate to the industry averages (30.82% and 10.5%), and write a statement on MMC's…[2 marks]

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