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Dear Sir,
Thank you again for making learning accounting a fun through your lectures.
May I request you, if you can clarify below 2 points
a)
In solution to exam preparation question 1 on page 149 in lecture notes, the Issue cost is added to retained earnings..Doesnt it have to be reduced to get end period retained earnings as 784,000b)
In exam preparation question 2 on page 57 in lecture notes, the requirement is to prepare statement of changes in equity in Henderson Co for the year ended 30th June 20X8…This opens up a plethora of further calculations..
Is this a misprint as solution provided is till 31.03.20X8a) is this not correcting the error they have made in the initial treatment of the costs?
b) maybe it is a misprint and I’ll check and update it.
Thanks
Thank you and appreciate your time and efforts in making replies to students like me.
I am still not clear with respect to part a) related to exam preparation question 1.
Draft retained earnings as at 31st december 20X7 is provided and the issue was made on 1st January 20X8. In relation to issuance cost it is simply stated that $200,000 of direct costs related to the issue were incurred and charged to P&L. So I am still not clear why the amount needs to be added instead of reducing it from the retained earnings…Please help me in understanding this part.
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