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In my current exam I need to prepare the profit and loss account and the balance sheet. I understand most of what I need to do, however, when it comes to shares and dividends i’m really struggling.
In the additional information of my trial balance it says:
Provide for a Preference Dividend
Authorised Share Capital is 100,000 £1 Ordinary Shares and 20,000 in Preference Shares.In the trial balance the figures shown for these things are:
10% Preference Share Capital 20,000
Ordinary Share Capital 70,000I honestly have no idea what to do with these figures or where to put them.
I also wondered, when I am transferring an amount to the General Reserve Account, where do I take this figure from? Is this just from the retained earnings?
Thanks!
You must ask this question in the Paper F3 Ask the Tutor Forum – not in the general forum.
Have you watched the free lectures? They are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
(We stopped using the names “Profit and Loss Account” and “Balance Sheet” many years ago!!! They are called “Statement of profit or loss” and “Statement of financial position”, and this is what they will be called in the Paper F3 exam.)
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