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NANYANG POLYTECHNIC SCHOOL OF BUSINESS MANAGEMENT ------------------------------------------------- BM0075 – Essentials of Financial and Management Accounting ------------------------------------------------- Revision Questions for ICA1 Question 1 The following transactions for Pinky Pte Ltd were completed in year 2013. Jan 10 Invitation in respect of 351,500,000 ordinary shares comprising 201,500,000 New Shares and 150,000,000 Vendor Shares. The shares are issued at $0.33 per share. Mar 20 Declared and issued bonus shares, valued at $0.35 each to all existing shareholders on the basis of 1 bonus share for every 20 existing ordinary shares. The number of issued ordinary shares of the company including IPO is 400,000,000 ordinary shares. Jun 30 Issued right shares, valued at $0.33 each, to all shareholders on the basis of 1 right share for every 40 existing ordinary shares. Sep 30 Declare and issue cash dividends of $0.01 per share. The following assumptions were made: 1) Issue price of all shares issued before IPO is $0.20 per share. 2) Beginning retained earnings as at 1 January 2013 is $100,000,000 and the net profit for the year ended 31 December 2014 is $22,500,000. Required: (a) Prepare journal entries for all the transactions stated. (b) Prepare the Statement of Changes in Shareholders’ Equity for the year ended 31 December 2013. Question 2 The following information below is an extract of the financial statements of Good Show Pte Ltd for the financial years ended 30 June 2013 and 2014. | FY 2013 $ | FY 2014 $ | Sales revenue | 260,000 | 220,000 | Gross profit | 160,000 | 150,000 | Salary expense | 24,000 | 24,000 | Interest expense | 20,800 | 7,200 | Net profit before tax | 56,000 | 32,000 | Common dividends | 12,000 | 11,000 |

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