Exam 3: Shareholders Equity: Share Capital and Reserves

Gains or losses that arise as a result of translating foreign currency denominated operations into the reporting currency are recognised in income:

Use the following information to answer questions A company's capital consists of 50 000 ordinary shares issued at $2 and paid to $1 per share. On 1 September, a first call of 50c was made on the ordinary shares. By 30 September, the call money received amounted to $22 500. No further payments were received, and on 31 October, the shares on which calls were outstanding were forfeited. On 15 November, the forfeited shares were reissued as paid to $1.50 for a payment of $1 per share. The appropriate cash amount from the reissue was received on 19 November. Costs of reissue amounted to $2 000. The company's constitution provided for any surplus on resale, after satisfaction of unpaid calls, accrued interest and costs, to be returned to the shareholders whose shares were forfeited. -The entry to record the forfeiture of shares is:

Accounting for share buy-backs is prescribed by

In relation to share capital, AASB 101 does not require disclosure in the financial report of:

Dividends declared after the balance date but before the financial statements are authorised for issue:

When a public share issue is made, the offer comes from:

Retained earnings are a component of

Gains and losses on available-for-sale financial assets are recognised directly in equity until the financial asset is derecognised. At this time the cumulative gain or loss previously recognised is:

Which of the following does not appear in the Statement of Changes in Equity?

For-profit companies may be I Unlimited II Listed III Limited by guarantee IV No-liability

AASB 101 Presentation of Financial Statements requires the following items to appear on the face of the Statement of Changes in Equity I The net amount of cash from the issue of any securities during the period II The cumulative effect of changes in accounting policy and the correction of errors III Each item of income or expenses that are required to be recognised directly in equity IV Profit or loss for the period.

Which of the following is not a reason that companies may undertake a share buy-back?

The appropriate account to record any excess proceeds received and retained (not refunded) by a company from an oversubscription to a share offer application, is the:

Valdez 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:

ABC Ltd was registered as a corporation on 1 July 2014. On 4 July 2014, ABC Ltd issued a prospectus offering 100 000 ordinary shares at an issue price of $2.50 each, payable $1.50 on application and $1.00 on allotment. Application closed on 1 August 2014 with the company having received applications for 110 000 shares. The shares were allotted on 15 August 2014, with the over-subscription amount being refunded to unsuccessful applicants. All allotment monies were received by 31 August 2014. Following the allotment the balance in the Share Capital account would be:

Laws in relation to share buy-backs are primarily designed to protect the interests of the company's:

Which of the following statements is incorrect?

A company issued share option is an instrument that gives the holder the right but not the obligation to:

Whether a dividend is paid by a company depends on the decisions made by the:

The bonus issue of shares has the following impact on the equity of a company;