The Details Below Were Extracted from the Accounting Records of Great

question 7

Multiple Choice

The details below were extracted from the accounting records of Great South East Ltd (a company in the process of liquidation) . $\begin{array}{ll}&\$\\40000 \$ 1 \text { preference shares fully paid } & 40000 \\ 120000 \$ 1 \text { ordinary shares paid to } 50 \text { cents } & \underline{60000} \\ & \underline{100000}\\\\ \text { Cash available (after payment of all creditors) }&10000\end{array}$

Assume that the constitution of Great South East Ltd states that in the event of liquidation, all shares are to rank equally, based on the number of shares held, in distributing any surplus or deficiency.
For preference shareholders, what is the amount of the actual refund or call?

• A) A refund of $17 500
• B) A call of $17 500
• C) A refund of $10 000
• D) A call of $22 500

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Definitions:

Cash Over And Short

Cash Over And Short account tracks discrepancies between actual cash received and the expected amount according to sales documents or records.