1. One shareholder of Gonunda Ltd currently owns 1,000 shares representing 1% of the total number of shares issued. The shares were issued at $17 each, but the shareholder paid only $7 for each share. Gonunda Ltd was forced into liquidation with $5 million in outstanding debts.

Indicate the amount of the shareholder's liability to the nearest whole dollar.

2. ROE (return on equity) is measured by Profit / Average total equity. Assume ROE is less than 100%

Indicate the effect of the following event that occurred on the reporting date on this ratio.

EVENT: Cash sale of goods at cost price

Answer rating: 100% (QA)

1 The shareholders liability can be calculated as follows The shareholder owns 1 of the total number ... View the full answer