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Hello mike, in a published accounts question, there was a adjustment
“An equity dividend of 5 cents per share was paid in November 2010 (within this year) and charged to retained earnings”Does this mean its already charged to retained earnings and we don’t have to?
Please clarify, thanks
Hi
If the dividend has been taken out of earnings by way of expense in the Statement of Income, then then is incorrect treatment. It should be taken as an appropriation from retained earnings in the Statement of Changes in Equity.
Otherwise, if that’s the treatment which has been applied, then that’s ok.
Which question is it?
June 2011, Q2, 1st adjustment.
Where will it show if it has been adjusted or not for us to consider it or not?
“it has been charged to retained earnings” wasn’t that the correct treatment already?What it’s saying is that the figure of 1,400 in the list of balances has already been reduced by the dividend.
You are asked for a Statement of Changes in Equity so the broght forward figure for retained earnings needs to be increased by the dividend which has been charged and then the dividend will be shown as an appropriation of this year’s profits within that Statement
OK?
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