(Solution) - A summary of the statement of financial position of Doxin -(2025 Original AI-Free Solution)

Paper Details

A summary of the statement of financial position of Doxin plc, as at 31 December 20X0, is given below;

During 20XI, the company:
(i) Issued 200,000 ordinary shares of £1 each at a premium of I0p per share (a specific issue to redeem preference shares).
(ii) Redeemed all preference shares at a premium of 5%. These were originally issued at 25% premium.
(iii) Issued 4,000 7% debentures of £100 each at £90.
(iv) Used share premium, if any, to issue fully paid bonus shares to members.
(v) Made a net loss of £500,000 by end of year which affected the bank account.

Required:
(a) Show the effect of each of the above items in the form of a moving statement of financial position (i.e. additions/deductions from original figures) and draft the statement of financial position of 31 December 20XI.
(b) Consider to what extent the interests of the creditors of the company are beingprotected.