BBK Limited has share capital of 100 000 ordinary shares of 50p each, all of which have been issued to shareholders in exchange for cash.A dividend of 10p per share has been declared and is due for payment.What is the amount of share capital to be included in BBK's statement of financial position?

Question

Quizplus · Accepted Answer

The share capital to be included in the statement of financial position is the amount of money raised through the issuance of shares. In this case, all 100,000 ordinary shares with a par value of 50p each have been issued to shareholders in exchange for cash. Therefore, the share capital amounts to 100,000 x £0.50 = £50,000. The dividend of 10p per share does not impact the share capital, as it is a distribution of profits to shareholders.

BBK Limited Has Share Capital of 100 000 Ordinary Shares