Limited Company A/c

Question 1

How to get profit from op from profit for the year

Answer 1

Subtract tax and interest

Question 2

What goes into the equity section of a SoFP

Answer 2

Share capital
Share premium
Revaluation reserve
Retained earnings

Question 3

What is a revenue reserve

Answer 3

Profits from trading activities
They are Recognised
E.g Retained earnings

Question 4

What is a capital reserve

Answer 4

Profits from non-trading activities
They are unrecognised
E.g share premium

Question 5

What is authorised share capital

Answer 5

Max share capital a business can issue

Question 6

What is issued share capital

Answer 6

Amount of shares a business has actually sold

Question 7

How to calculate share I) premium II) capital

Answer 7

I) no of shares x premium per share
II) no of shares x nominal value

Question 8

A business sells 100 shares of par value 50p for £1.50 how much does this affect the equity section

Answer 8

Share capital up £50
Share premium up £100

Question 9

Property of cost £500,000 NBV £200,000 was revalued to £1,000,000 how much is equity affected

Answer 9

Revaluation reserve £800,000 increase

Question 10

What is the purpose in a Statement of changes in equity

Answer 10

Shows how equity has changed throughout the year