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hi sir ,
The following extract is from the statement of profit or loss of Gearing Co for the year ended 30 April
20X8.
$
Profit before tax 68,000
Tax (32,000)
Profit for the year 36,000
In addition to the profit above:
1 Gearing Co paid a dividend of $21,000 during the year.
2 A gain on revaluation of land resulted in a surplus of $18,000.
What total amount will be added to retained earnings at the end of the financial year?
A $36,000
B $33,000
C $47,000
D $15,000the ans is D . i dun understand why minus dividend ? dividend should be in statement on change in equity .?
thank you
Dividends are shown in the SOCE – as a reduction in retained earnings.
The retained earnings increase by the profit and reduce by the dividend, so the total increase is one less the other.
Because that goes to the revaluation reserve – not to retained earnings.
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