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- This topic has 5 replies, 2 voices, and was last updated 8 years ago by John Moffat.
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- June 7, 2016 at 1:41 pm #320293
hi sir ,
The following extract is from the statement of profit or loss of Gearing Co for the year ended 30 April
20X8.
$
Profit before tax 68,000
Tax (32,000)
Profit for the year 36,000
In addition to the profit above:
1 Gearing Co paid a dividend of $21,000 during the year.
2 A gain on revaluation of land resulted in a surplus of $18,000.
What total amount will be added to retained earnings at the end of the financial year?
A $36,000
B $33,000
C $47,000
D $15,000the ans is D . i dun understand why minus dividend ? dividend should be in statement on change in equity .?
thank you
June 7, 2016 at 3:15 pm #320362Dividends are shown in the SOCE – as a reduction in retained earnings.
The retained earnings increase by the profit and reduce by the dividend, so the total increase is one less the other.
June 8, 2016 at 2:28 am #320658Hi sir,
How about gain on revaluation on land?? Y not adding in?June 8, 2016 at 8:57 am #320732Because that goes to the revaluation reserve – not to retained earnings.
June 8, 2016 at 9:26 am #320750Ok… thank you…..
June 8, 2016 at 9:29 am #320756You are welcome 🙂
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