Neco Model Questions Vol1 2022 Financial Accounting Question 7

Practice objective / multiple choice question 7 from the 2022 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2022 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 7 NECO_MODEL_QUESTIONS_VOL1 • 2022 • FINANCIAL_ACCOUNTING • objective

XYZ Ltd has the following opening balances: Ordinary share capital (10,000 shares of ₦100 each) - ₦1,000,000; Ordinary share premium - ₦200,000; Preference share capital (5,000 shares of ₦100 each) - ₦500,000; Retained earnings - ₦300,000. During the year the company: - earned profit after tax of ₦1,200,000; - paid a 10 % dividend on preference shares; - issued 2,000 additional ordinary shares at ₦130 each; - redeemed 500 preference shares at ₦110 each. Assuming the redemption is funded from retained earnings, determine: (a) the total equity of the company at year‑end; (b) the earnings per ordinary share (EPS) for the year.

Answer Options

A. Total equity = ₦3,250,000; EPS = ₦92.50 per ordinary share
Correct Answer B. Total equity = ₦3,305,000; EPS = ₦95.83 per ordinary share
C. Total equity = ₦3,305,000; EPS = ₦100.00 per ordinary share
D. Total equity = ₦3,315,000; EPS = ₦96.00 per ordinary share
Correct Answer
B
Correct Option:
Total equity = ₦3,305,000; EPS = ₦95.83 per ordinary share

About This Question

This is Neco Model Questions Vol1 2022 Financial Accounting Question 7. It is one of the objective questions from the 2022 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Hard .

View More Neco Model Questions Vol1 2022 Financial Accounting Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support