Professional Documents
Culture Documents
Question One
Glass plc (‘Glass’) is a UK listed company. On 1 November 2003 its issued share capital was
10,000,000 ordinary shares of 60p each and 4,000,000 4% preference shares of £1 each. During
the year ended 31 October 2004 the company made a rights offer to its shareholders of three new
ordinary shares of 60p each for every 10 existing ordinary shares held. The offer was fully taken
up by shareholders, who purchased the new shares for £3 each on 1 May 2004. The fair value of
each ordinary share on 30 April 2004 was £4.15.
At 31 October 2004 the ordinary shareholders of Glass also held options, exercisable between 1
November 2007 and 1 May 2008, to purchase 1,200,000 ordinary shares at £2.80 per share. No
options were issued during the year ended 31 October 2004. The average fair value of the
ordinary shares during the year was £4.20 each.
The company paid an ordinary dividend of £1,040,000 and a preference dividend of £160,000
during the year to 31 October 2004.
Glass’s draft profit and loss account for the year ended 31 October 2004 shows the following:
£000’s
Operating profit 4,525
Interest payable (329)
Profit on ordinary activities before taxation 4,196
Taxation (1,279)
Profit on ordinary activities after taxation 2,917
Minority interests (132)
Profit for the financial year 2,785
Required:
(1) Calculate the basic earnings per share for Glass for the year ended 31 October 2004.
(2) Calculate the diluted earnings per share for the year ended 31 October 2004.
(3) Prepare the earnings per share disclosure note for the year ended 31 October 2004.
Note:
Comparative figures are not required
(20 marks)
Required:
(a) Prepare a statement in columnar form showing the beneficiaries accumulations accounts
for the period Up to 1stApril, 2005.
(b) Prepare a Balance Sheet as on 1st April 2005.
(20 marks)
Question Three
The summarized assets and liabilities position of Hopeful Ltd as on 1.4.1996 was as follows:
Liabilities TZS
Authorized Capital:
30,000 Equity Shares of TZS. 100 each 8,000,000
20,000 9% Preference Shares of TZS. 100 each 2,000,000
Assets
Goodwill 200,000
Land and Buildings 1,600,000
Plant and Machinery 1,200,000
Investments 240,000
Stock 540,000
Debtors 1,180,000
Cash in Hand 60,000
Profit and Loss Account 1,420,800
6,440,800
Notes:
a) Dividend on Preference Shares has not been declared for 2 years.
b) No provision has been made for sales tax liability of TZS. 90,600
Required
i) Pass necessary journal entries recording the above transactions, and
ii) Draw up a fresh balance sheet after giving effect to the Scheme of Reconstruction.
Question Four
In a series of misfortunes George Temu files his petition for bankruptcy and a receiving order
is made on him on 30th June 2010. The following information is available.
b) A loan secured from the Tanzania Investment Bank, at 6% interest on the security of the
Motor Vehicles, was outstanding on this date at Tsh. 20,600
c) Other business liabilities include;
Tsh. 36,200 due to trade creditors, out of which a claim for Tsh. 2,400 is statute barred.
Tsh. 9,200 due to Mrs. Temu being the amount advanced by her for meeting workers’
salary for May 2010.
Tsh. 9,200 due as salaries to workers, for June 2010.
You are required to prepare the statements of affairs and deficiency statement.
(25 marks)
Question Five
a) Explain what you understand by the following terms
i. Estates
ii. Beneficiaries
iii. Will
iv. Dying In testate
v. Dying Testate
b) What are the important features of a valid will?
c) When is a will not valid?