Question 6
ICAN
•
2024
•
FINANCIAL REPORTING
•
mixed
Case Stimulus
Akwa Nig. Limited is a private limited company planning to be registered with the Nigeria Exchange Limited (NGX). The company is engaged in the conversion of petrol engine into compressed gas engine.
Requirements
(
a
)
Akwa Nig. Limited issued 40million non-redeemable N1 preference share at par value. Under the terms relating to the preference shares, a dividend is payable on the preference shares only if Akwa Nig. Limited also pays a dividend on its ordinary shares for the same period.
(
b
)
Akwa Nig. Limited entered into a contract with a supplier to buy a significant item of equipment. Under the terms of the agreement the supplier will receive ordinary shares with an equivalent value of N5million one year after the equipment is delivered.
(
c
)
The directors of Akwa Nig. Limited on becoming director are required to invest a fixed agreed sum of money in a special class of N1 ordinary shares that only directors hold. Dividend payments on the shares are discretionary and are ratified at the Annual General Meeting (AGM) of the company. When a director’s service contract expires, Akwa Nig. Limited is required to repurchase the shares at their nominal value.
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About This Question
This is
Ican
2024
Financial Reporting
Question 6.
It is one of the
mixed
questions from the
2024
Ican
Financial Reporting
examination.