- This topic has 15 replies, 2 voices, and was last updated 7 years ago by
.
- Posts
ABC co had the following share capital in issue for the year ended 31 dec 2004.
7% Irredeemable preference shares 30,000
5% redeemable preference shares 60,000
$1 ordinary shares 100,000
company paid all preference dividends and also paid an interim dividend of 0.05 per share during the year. What should be shown as dividend paid in the statement of changes of equity?
Sir i have watched all your videos..
okay so 100,000 multiply by 0.05 =5000
5% of 60,000 =3000
7% of 30,000 =2100
so total 10100..sir my answer is wrong? why? the correct answer is 7100..what concept am i lacking here?i have another doubt…
Garden co. has retained earning brought forward of $345,933.
During the year
1) The company made a loss of $87,455
2) Assets were revalued in an increase in the revaluation reserve of $145,000
3) interim dividends of $30,000 were paid during the year
4) The final dividend of $25000 for the prior year was paid at the beginning of the year
what is the total comprehensive income for the year to be reported in the statements of comprehensive income?
The correct answer is 523,378..
but i am not able to get the correct answer… i have watched ur videos..how to solve this question? dunno where am i making mistake… which concept do i lack? please explain this question sir..First question: Dividends on redeemable preference shares are recorded as interest rather than as dividends (because redeemable preference shares are more like ordinary fixed interest borrowing).
Second question: If you have copied the question correctly, then the answer is not 523,378.
The comprehensive income for the year is 145,000 – 87,455 = 57,545Yeaahhh for question 2 the answer is correct..sir why is opening retained earnings not included ?
Dividend paid is not included because its included in the statement of changes of equity? Am i right?Sir for 1 question the answer will be $1 multiply by 0.05 = 5000 adding 2100 from 7% irredeemable preference share so total 7100.. but sir the question says that company paid all prefer dividends? We arent taking redeemable preference share dividends coz its treated as an interest right? Is that the way?but redeemable is a liability on the company they are supposed to pay dividends and should record it in statement of changes of equity sir?
Okay another question of control account reconciliation
A receivables ledger control account had a closing balance of $8,500. It contained a contra to the purchase ledger of $500, but this had been entered on the wrong side of the control account
The correct balance on the receivables ledger control account should be?
Sir look if i make a ledger..the contra comes on the CR in RCLA so they debited the contra..to correct this entry i will add 400 2 times and 8,500 should also come in the cr side as its closing balance.. sir when i am doing it through the ledger my answer is coming wrong..
but at the back of the kaplan book..its done like this 8,500-(400 * 2 ) = 7700 Debit
How is contra being subtracted? I dont get this?Sir another doubt in RCLA the refunds made to customers comes on the debit side? Why sir? It is decreasing our receivables it should come on the credit side..
Sir another doubt
A credit balance of $917 brough forward on Y’s account in the books of X means that
A X owes Y $917
B Y owes X $917
C X has paid Y $917
D X is owed $917 by Y
Sir why is the answer not. B m getting confusedhere.. It is like a purchase ledger account right? Coz in purchase ledger control account the brought forward is on the credit side..sir m being confused hereee immenselySir another doubt for BRS
The cashbook shows a bank balance of $5675 overdrawn at 31st March 3005. It is subsequently discovered that a standing order for $125 had been entered twice and that a dishonoured cheque for $450 had been debited in the cash book instead of credited..
Sir here if i make a ledger 5675 on credit side then comes 450 * 2= 900 so sir 125 has been added twice so it must have been added twice on the credit side so one should be left on the credit side but sir it is coming on the debit side..i dont get this?? Please explainn
I have watched all your videossssSir standing order is always credited in the cash book so where have they added the $125 twice? This is confusing
In future you must start a new thread whenever you are asking a question on a different topic. It is because our answers are for the benefit of everyone – many students use the search box to check for existing answers. We do not give private tuition 🙂
First question:
The comprehensive income for the year means what it says – it is for the year and therefore does not include retained earnings brought forward. Dividends paid never appear in either the SOPL or the Statement of comprehensive income.
Second question:
Dividends on redeemable preference shares are treated the same as interest. Therefore the profit is reduced. Therefore they are not shown again on the SOCE.
Third question:
The closing balance on receivables is always a debit balance!
The contra entry always reduces receivables (and reduces payables).Watch my free lectures on this 🙂
Fourth question:
Refunds are repayments of cash and so always appear on the debit side of receivables.
Again, I explain this in detail in my free lectures on control accounts.
Fifth question:
It is a credit balance in X’s books. Therefore X is owing the money (to Y).
Sixth question:
If the standing order has been entered twice, then they will have credited cash twice.
One of the entries needs ‘cancelling’ and so to cancel it we debit cash.
(You say that you have watched all of my lectures, but it would be sensible to watch the relevant lecture again when you find you have a problem with a particular question!)
- The topic ‘F3 doubts’ is closed to new replies.