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If we have 6% irredeemable non-cumulative preference shares of $1 100000, where should we adjust 6% dividend of shares???? isn’t preference dividend adjusted in comprehensive income as finance cost????
At 31 December 2007 Ava estimates that its current tax liability for the year will be
$150,000. In August 2008
Ava pays its tax liability for the year ended 31 December 2007 at $147,000.
At 31 December 2008 Ava again estimates its income tax liability, this time at
$155,000.sir, we prepare taxation liability ledger we get 155000 balancing fig, and if we prepare expense account we get 152000. so, what value are we going to adjust in SOFP and SOCI?
Yes (because share premium is a capital reserve). If there is not enough share premium then it is subtracted from other reserves, but that is unlikely in the exam.
sir, u haven’t replied my all ques..
we have 6% irredeemable non-cumulative preference shares of $1 100000, where should we adjust 6% dividend of shares???? isn’t preference dividend adjusted in comprehensive income as finance cost????At 31 December 2007 Ava estimates that its current tax liability for the year will be
$150,000. In August 2008
Ava pays its tax liability for the year ended 31 December 2007 at $147,000.
At 31 December 2008 Ava again estimates its income tax liability, this time at
$155,000.sir, we prepare taxation liability ledger we get 155000 balancing fig, and if we prepare expense account we get 152000. so, what value are we going to adjust in SOFP and SOCI?
It is only redeemable preference shares that are treated like debt (dividends shown as finance cost, and shares shown as non-current liability).
Irredeemable shares are treated like equity.
Don’t for heavens sake waste time producing t-acounts in the exam.
In the SOFP you show the amount owing at the end of the year – 155,000.
In the Statement of profit or loss you show 150,000 + 155,000 – 147,000 = 158,000.
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