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8 marksLimited Liability Companies

CSEC Principles of Accounts · January 2014 · Paper 2 · Question 7(b)

On 1 June 2013, Designers Inc. issued 180 000 Ordinary Shares at 1.00 each and 64 000 7% Preference Shares at 2.00 each. All shares were fully subscribed.

Prepare the journal entries to record the issue of shares.

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Other parts of this question

  1. 7(a)(i)Fill in the steps of the accounting cycle in the correct sequence on the flow chart provided.[3 marks]
  2. 7(a)(ii)State ONE purpose for EACH of the following steps in the accounting cycle: • Trial balance • Source documents[2 marks]
  3. 7(c)(i)Calculate the Profit Percentage for Designers Inc., rounding off to the nearest whole number. Show formula working.[3 marks]
  4. 7(c)(ii)Calculate the Return on Investment for Designers Inc., rounding off to the nearest whole number. Show formula working.[3 marks]
  5. 7(c)(iii)Briefly comment on the profitability of Designers Inc.[1 mark]

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