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MC Question 7
At 31 March 2015, Jasim had shareholders’ funds (equity) of $200,000 and debt of $100,000.
Which of the following transactions would increase Jasim’s gearing compared to what it would have been had
the transaction NOT taken place?
Gearing should be taken as debt/(debt + equity). Each transaction should be considered separately.
| A | During the year a property was revalued upwards by $20,000 |
|---|---|
| B | A bonus issue of equity shares of 1 for 4 was made during the year using other components of equity |
| C | A provision for estimated damages was reduced during the year from $21,000 to $15,000 based on the most |
| D | An asset with a fair value of $25,000 was acquired under a finance lease on 31 March 2015 |