The Details Below Were Extracted from the Accounting Records of Capricorn

question 13

Multiple Choice

The details below were extracted from the accounting records of Capricorn Ltd (a company in the process of liquidation) . $\begin{array}{ll}\text {\( 100000 \$ 1 \) preference shares fully paid }&\$ 100,000\\\text {\( 200000 \$ 1 \) ordinary shares paid to 50 cents }&100,000\\&\$200,000\\\text { Cash available (after payment of all creditors) }&\$20,000\end{array}$
Assume that the constitution of Capricorn 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, the amount of the actual refund or call is:

• A) A call of $20 000.
• B) A call of $100 000.
• C) A refund of $20 000.
• D) A refund of $40 000.

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Definitions:

Net Sales

The revenue from sales transactions after deducting returns, allowances, and discounts.

Net Income

The total profit of a business after all expenses and taxes have been subtracted from revenue.

Cost Allocation

The process of identifying, aggregating, and assigning costs to cost objects, such as products, services, or departments.

Intangible Asset

An identifiable non-monetary asset without physical substance, such as patents, trademarks, and goodwill, that provides economic benefits.