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Preference Shares – ACCA Financial Accounting (FA) lectures

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  1. If dividends deduct from retained earnings in SOCIE so it should also appear in SOFP in retained earning portion. so why not it came in SOFP in this question:
    The following information is available about a company’s dividends:
    (Declared August 20X5)
    Sept 20X5 Final dividend for the year ended 30 June 20X5 paid $ 100,000
    March 20X6 Interim dividend for the year ended 30 June 20X6 paid $ 40,000
    (Declared August 20X6)
    Sept 20X6 Final dividend for the year ended 30 June 20X6 paid $120,000
    Statement of profit or loss Statement of financial position
    What figures, if any, should be disclosed in the company’s statement of profit or loss for the year ended 30 June 20X6 and its statement of financial position at that date?
    a) $160,000 deduction $120,000
    b) $140,000 deduction Nil
    c) Nil $120,000
    d) Nil Nil
    Its answer is D

    • In future you must ask this sort of question in the Ask the Tutor Forum and not as a comment on a lecture.

      Of course dividends affect the retained earnings (and they affect the cash balance as well) but it is the retained earnings (and the cash balance) that appear on the SOFP – not the dividends. Dividends will only appear on the SOFP if they have been declared but not yet paid, in which case they appear as a liability.

  2. building cost 25000 and residual value 500 and building is revalued at 30000 how can complete through double entry .plzz tell me double entry with solution. 10% straight line method.
    25000-500=24500*10%=2450
    sir have revalued amount 30000 next how solve question.and prepareT account. or double entry.

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