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Mr. John
Can you please explain the answer to test qn 4 in chpt 13 acc for ltd co’s… why dividends are not shown on theSOPOL and SOFPDividends never ever appear on the Statement of profit or loss. (Dividends paid or declared appear in the Statement of changes in equity).
Dividends only appear in the Statement of financial position if they are owing at the end of the year. They are only owing if (obviously) they have not been paid, and if they are ‘certain’ They are only certain if they have been declared before the end of the year.
(If they simply been proposed, then they have not yet been voted on by the shareholders and are not therefore ‘certain’.)In test question 4, the year end is 30 June. The first two dividends listed have already been paid (and are therefore not owing at the year end). The third dividend was neither paid nor declared until after the 30th June. Therefore nothing appears in the Statement of financial position.
Have you checked the answer at the end of the Course Notes?
If you say which part of the answer is puzzling you then I will try and help.
(I assume that you have watched the lectures on right and bonus issues?)
Yes i have checked the answers at the end of the course notes but those do not have any explanations. I have also watched the lectures on rights and bonus issues.
After trying countless times, i was able to figure out the share premium figure, but dont know why the share capital figure for rights issue is 62,500 (1/2*500000)x 0.25c instead of $1 as stated in the question.
Please can you clarify that?
The existing shares are 25c shares, and the new shares are always the same type of shares – they have a nominal value of 25c also.
The are sold for $1 each, so the nominal value of 25c goes to share capital and the extra 75c goes to share premium.
Hi
Dear John
Which of the following stateme ts are true of limited liability company?The company s exposure to debts and liability is limited?
Financial statemnts must be produced1 is not correct y? But it is limited
Should companies produce financial statements?If you listen to the very first lecture, you will hear that it is the shareholders liability that is limited. The company’s liability is not limited.
Yes – limited companies have to produce financial statements once a year.
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