The Details Below Were Extracted from the Accounting Records of Great

question 31

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.
What will be the deficiency or surplus apportioned to preference shareholders?

• A) A surplus of $22 500
• B) A deficiency of $22 500
• C) A surplus of $67 500
• D) A deficiency of $67 500

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Definitions:

Miotic

Pertaining to or causing the constriction of the pupil of the eye.

Myopia

A visual condition, also known as nearsightedness, where close objects appear clearly, but distant objects are blurry.

Choroiditis

Inflammation of the choroid, a vascular layer of the eye, leading to vision problems.

Cycloplegia

Paralysis of the ciliary muscle of the eye, resulting in a loss of accommodation and inability to focus on close objects.