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Single entity

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Single entity

  • This topic has 1 reply, 2 voices, and was last updated 6 months ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • December 4, 2021 at 12:18 pm #642484
    Varun.J.Thakkar
    • Topics: 30
    • Replies: 33
    • ☆☆

    6% preference shares of $1 each (note (ii)) 52,000
    Preference dividend paid (note (ii)) 3,000

    The 6% preference shares were issued at par on 1 April 20X3 for $50 million. They
    are redeemable at a large premium which gives them an effective finance cost of
    10% per annum.

    Their solution
    (W3) Preference shares
    Year b/f Interest @ 10% Payment c/f
    $000 $000 $000 $000
    31 March 20X4 52,000 5,200 (3,000) 54,200
    To finance costs Per trial balance To NCL

    Dear sir, is there a printing error in the q?
    Shouldnt it be
    50000(bal b/f) + 5000(effective interest)- 3000(interest paid) = 52000(at 31 march 20X5)
    Ur assistance is kindly needed as i am having my paper on 9th
    Thanks a lot

    December 11, 2021 at 11:34 am #643888
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6115
    • ☆☆☆☆☆

    Hi,

    I think you need to look at the dates a bit more closely as we are not in the first year of issue of the instrument…….

    Thanks

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