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10 marksPreparation of Corporate Financial Statements

CAPE Accounting Unit 1 · 2012 · Paper 2 · Question 2(c)

William Barker organized Fancy Beachwear Inc in 2009 with authorized share capital of 500 000 shares at 5 each. - 15 January 2009: Issued 40 000 ordinary shares at 6 each. - Pre-tax profit for 2009 was 120 000; no dividends were declared. - In 2010: 1 for 2 rights issue at 5 per share, fully taken up; pre-tax profit was 625 000. - In June 2011: Bonus issue of 1 share for every share in issue; pre-tax profit was 750 000. - Corporation tax rate was 35% for 2009–2011.

Prepare the Shareholder Equity section of Fancy Beachwear Inc at 31 December 2011.

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Other parts of this question

  1. 2(a)Copy and complete Table 2 by putting a tick (✓) to indicate whether each characteristic applies to a Corporation or Partnership.[5 marks]
  2. 2(b)(i)Prepare the Capital Adjustment Account showing charges to the Plant and Machinery Account, Building Account, Goodwill, and the Partners' Capital Accounts…[10 marks]
  3. 2(b)(ii)Prepare the Balance Sheet showing the opening position of the new partnership of Kwame, Kendal, and Janet.[10 marks]

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