After Payment of All Claims Apart from Payments to Capital

question 16

Multiple Choice

After payment of all claims apart from payments to capital contributors, the liquidator prepares the following statement of shareholders' equity for Hoppers Ltd:
$\begin{array}{llcc} \text { } &\$\\ \text {Ordinary shares fully paid ( 5000000\( ) \) } &2000000 \\ \text { Reserve} &?\\ \text { Accumulated losses } &(1500000) \\ \text { Total} &?\\\end{array}$

What is the total of the reserves if the cash available for distribution after all other claims is $850 000 and the deficit is $550 000?

• A)$900 000
• B)$950 000
• C)$1 350 000
• D)$1 400 000