You are the management accountant of Short plc. On 1 October 1993 Short plc issued 10 million £1…

You are the management accountant of Short plc. On 1 October 1993 Short plc issued 10 million £1 preference shares at par, incurring issue costs of £100 000. The dividend payable on the preference shares was a fixed 4% per annum, payable on 30 September each year in arrears. The preference shares were redeemed on 1 October 1998 at a price of £1.35 per share. The effective finance cost of the preference shares was 10%. The balance sheet of the company on 30 September 1998, the day before the redemption of the preference shares, was as follows:

Requirements

(a) Write a memorandum to your assistant which explains:

● how the total finance cost of the preference shares should be allocated to the profit and loss account over their period of issue;

● where in the profit and loss account the finance cost should be reported;

● where the preference shares should be disclosed in the balance sheet;

● the nature of any supporting information which is required to be disclosed in the notes to the financial statements regarding the preference shares.

Your memorandum should refer to the provisions of relevant Accounting Standards.

(8 marks)

(b) Calculate the finance cost in respect of the preference shares for EACH of the five years ended 30 September 1998. (7 marks)

(c) Assuming no changes other than those caused by the redemption of the preference shares, prepare the balance sheet of Short plc at the end of 1 October 1998. You should give an explanation for any changes to any of the headings or any new headings which are required. (5 marks)

CIMA, Financial Reporting, November 1998 (20 marks)

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
error: Content is protected !!