Chapter 11 financial instruments

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April 30, 2023 at 2:09 pm #683758
AliSher123
Participant
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Exam preparation question 1
Retained earnings
Answers at back
1250 draft
200 issue costs
(266) eff int
1184 retained earnings balance at 31 dec 20X8
Question : why are issue costs added ?
May 2, 2023 at 9:15 pm #683857
P2-D2
Keymaster
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Hi,

The issue costs have been treated incorrectly, where they have expensed them through profit or loss, thus reducing the profit for the year. To correct the error we need to remove the expense created and therefore add it back.

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