C JC plc is in financial difficulty. There is likely to be a dilution in the ex-rights share price. LM Ltd is a privately owned trading company. During the year to December 31, 20x8 LM Ltd received 850,000 from debtors, and paid 325,000 to suppliers. LM Ltd typically takes 90 days to pay for goods supplied, and allows 90 days credit to customers.
Production is scheduled evenly throughout the year.
Stocks increased by 75,000 during the year. B Carries forward the right to preferential dividends, if unpaid, from one year to the next. C Entitles the shareholder to a share of residual profits. D Entitles the shareholder to a fixed rate of dividend. Solutions to the multiple choice questions S 1.