Sox Ltd Has Two Classes of Ordinary Shares: 100 000

question 3

Multiple Choice

Sox Ltd has two classes of ordinary shares: 100 000 fully paid A ordinary shares (paid-up share capital $100 000) and 25 000 fully paid B ordinary shares (paid-up share capital $100 000) .The company was placed in liquidation.Liquidator's fees totaled $85 000, the assets were sold for $1 775 000 and these assets had a carrying amount of $1 600 000.
-B ordinary shareholders have preference for return of capital.Which of the following extract of entries is most likely to correctly show the members' distribution account of Sox Ltd assuming the preference is fully satisfied?

• A)\(\begin{array}{llcc}
• \text { } & \text { Debit (\$)} &\text { Credit (\$)}\\
• \text { Members' distribution - A ordinary} &&100000\\
• \text {Members' distribution \(- \mathrm { B }\) ordinary } &?\\
• \end{array}\)
• B)\(\begin{array}{llcc}
• \text { } & \text { Debit (\$)} &\text { Credit (\$)}\\
• \text { Members' distribution - A ordinary} &&?\\
• \text {Members' distribution \(- \mathrm { B }\) ordinary } &&50000\\
• \end{array}\)
• C)\(\begin{array}{llcc}
• \text { } & \text { Debit (\$)} &\text { Credit (\$)}\\
• \text { Members' distribution - A ordinary} &?\\
• \text {Members' distribution \(- \mathrm { B }\) ordinary } &100000\\
• \end{array}\)
• D)\(\begin{array}{llcc}
• \text { } & \text { Debit (\$)} &\text { Credit (\$)}\\
• \text { Members' distribution - A ordinary} &&?\\
• \text {Members' distribution \(- \mathrm { B }\) ordinary } &&100000\\
• \end{array}\)

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Definitions:

Labour Costs

The total expenditure borne by employers for the payment of wages, benefits, and other forms of compensation to their employees.

Pay Grades

A structure categorizing employees based on job functions, responsibilities, and pay ranges, designed to ensure fair and equitable compensation within an organization.

Reclassify

The process of changing the classification or status of an employee or job within an organization, often due to changes in job duties or organizational structure.

Point Method

A systematic approach in job evaluation that assigns point values to job factors to determine the relative worth of different jobs within an organization.