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Nice

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Nice

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by MikeLittle.
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  • November 24, 2015 at 9:39 pm #285027
    Miguel
    Member
    • Topics: 38
    • Replies: 30
    • ☆☆

    Hi Mike,

    Related with this practice question shouldnt the net profit for the year have +50 instead of -50 (per answer 566-50)? And as well why on the share premium column there is a deduction of 40 (as per question a bonus issue of $200k $1 equity bonus shares capitalizing its share premium account) then shouldn’t the deduction be for 200? Thanks for the clarification.

    November 24, 2015 at 9:55 pm #285034
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22702
    • ☆☆☆☆☆

    $200 is taken out of share premium but there is an issue of 400,000 shares at a premium of 40 cents per share which gives a credit to share premium of $160. Netting the two off against each other gives a reduction of $40 in the share premium column

    The $40 that was previously accumulated in the Revaluation Reserve, because of the change in accounting policy, has been retrospectively taken out of Revaluation Reserve and credited to Retained earnings.

    The fall in value this year of $50 represents a loss this year and has been set against the previously reported profit figure of $566

    OK?

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