Limited companies: past paper questions
Real questions on limited companies
The newest 20 of 50 written questions. Open one to see it on the real paper.
- 9706/21 · October/November 2025 · Q1b[7]
Complete the statement of changes in equity for the year ended 31 December 2024. T plc Statement of changes in equity for the year ended 31 December 2024 Share capital $ Revaluation reserve $ Retained earnings $ 120 000 80 000 330 800 Total $ At 1 January 2024 Share premium $ 900 000 Workings: At 31 December 2024
See it on the paper → - 9706/21 · October/November 2025 · Q1c[9]
Prepare the statement of financial position at 31 December 2024. T plc Statement of financial position at 31 December 2024 Additional information The directors are considering two options of financing the redemption of debentures in 2025: option A: make a new issue of 250 000 ordinary shares of $0.50 each at a premium...
See it on the paper → - 9706/21 · October/November 2025 · Q1d[7]
Advise the directors which option they should choose. Justify your choice by considering the advantages and disadvantages of both options.
See it on the paper → - 9706/21 · May/June 2025 · Q2a[4]
Explain two benefits of trading as a limited company rather than as a partnership. 1 January 2024 $ 31 December 2024 $ ? 1 600 000 Share premium 320 000 400 000 Retained earnings ? 243 000 General reserve – 50 000 120 000 120 000 10% Bank loan – 50 000 Taxation charge 16 000 22 000 Share capital: ordinary shares of $2...
See it on the paper → - 9706/21 · May/June 2025 · Q2b[1]
Calculate the amount received from the issue of shares on 30 June 2024.
See it on the paper → - 9706/21 · May/June 2025 · Q2c[2]
Calculate the total of the interim dividend paid on 31 March 2024.
See it on the paper → - 9706/21 · May/June 2025 · Q2d[4]
Calculate the profit from operations for the year ended 31 December 2024.
See it on the paper → - 9706/21 · May/June 2025 · Q2e[4]
Prepare the retained earnings account for the year ended 31 December 2024. Retained earnings account Date Details $ Date Details $
See it on the paper → - 9706/22 · February/March 2025 · Q3a[9]
Prepare the following ledger accounts for the year ended 31 December 2024. Ordinary share capital account $ $ Share premium account $ $ Retained earnings account $ $ Revaluation reserve account $ $ Workings:
See it on the paper → - 9706/22 · February/March 2025 · Q3b[2]
State two features of capital reserves.
See it on the paper → - 9706/22 · February/March 2025 · Q3c[4]
State two differences between a rights issue of shares and an issue of debentures.
See it on the paper → - 9706/32 · February/March 2024 · Q1d[5]
Advise the directors which option they should choose. Justify your answer.
See it on the paper → - 9706/22 · October/November 2023 · Q1d[7]
Advise the directors whether or not they were correct to make a bonus issue of shares rather than make a new issue of shares. Justify your answer.
See it on the paper → - 9706/33 · May/June 2023 · Q1c[4]
Calculate the amount paid by J Limited into the partnership bank account.
See it on the paper → - 9706/21 · October/November 2022 · Q1c[5]
Advise the directors whether or not they should make a rights issue of ordinary shares to repay the debentures. Justify your answer.
See it on the paper → - 9706/21 · October/November 2022 · Q3b[3]
State three reasons why a company may make a bonus issue of shares.
See it on the paper → - 9706/21 · October/November 2022 · Q3c[2]
State two features of preference shares.
See it on the paper → - 9706/22 · October/November 2022 · Q1a[3]
Prepare the journal entry to record the bonus issue of shares. Dates and narrative are not required.
See it on the paper → - 9706/33 · October/November 2022 · Q2f[2]
State two other matters which might be covered in the directors’ report of AB plc.
See it on the paper → - 9706/33 · October/November 2022 · Q3a[2]
Suggest two reasons why the merger made possible the savings in administrative expenses.
See it on the paper →
What examiners said
Candidates were asked to complete the ledger accounts for the equity section rather than a statement of changes in equity. There were many weak responses to this question. Some candidates did gain own figure marks for the balances brought down. However, only few positioned the correct amounts in the appropriate accounts and labels were often incorrect where candidates clearly demonstrated that the...
— Examiner report, February/March 2025, 9706/22 Q3(a) (Cambridge)
Features of capital reserves was well answered with many gaining full marks for correct explanations. Many candidates were able to state that capital reserves arise from non-trading activities and cannot be used to finance dividend payments. Some incorrectly thought that the reserves were used to purchase non-current assets.
— Examiner report, February/March 2025, 9706/22 Q3(b) (Cambridge)
This question was well answered with many candidates giving a correct explanation of both differences. There was some misunderstanding about control issues and having a say in decision making which were too vague to be awarded. Stronger candidates discussed the dividends versus interest paid and the permanent nature of a rights issue versus repayment required for debentures.
— Examiner report, February/March 2025, 9706/22 Q3(c) (Cambridge)
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