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Hi Sir,
I have started my studies for F7 from the Opentiution lecuture notes on Page 12 of Chaper 3 Lecture Example 1. In this question one is asked to show the events for the year in the Statement of Changes in Equity.
The answer is shown in pg 149. What I cannot understand is how the Surplus on property revaluation (25k) is worked out. In the question it says that a non-current asset with a carrying value of 130k was written down to 95k. The difference between the two is 35k.
Can you please explain??
Only 25,000 can be allocated to the revaluation account because only 25,000 has been credited to that account in previous years in respect of that asset.
However, the remaining 10,000 should have been deducted as an adjustment to the 421 profit for the year so thank you for pointing that out to me – I shall correct it for June 2013 – but of course that will be too late for you – you will already by then be looking at F8 and F9 🙂
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