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P2 – Reconstructions

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › P2 – Reconstructions

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  • October 8, 2015 at 11:42 am #275525
    carinarodd
    Member
    • Topics: 3
    • Replies: 1
    • ☆

    Hi Mike,

    For the reconstruction example given in chapter 17 of the notes, I’m struggling to understand how the Trade Payables, Retained Earnings, and Balance at Bank figures have been calculated in the SOFP – can you please explain?

    Thanks,
    Carina

    October 8, 2015 at 1:13 pm #275532
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23200
    • ☆☆☆☆☆

    Payables ….. 40c in the $ on $19,600 = $7,840

    Balance at bank – page 145 Cash Account shows $4,000

    Retained earnings – page 145 Reconstruction Account $2,760

    OK?

    October 8, 2015 at 3:34 pm #275549
    carinarodd
    Member
    • Topics: 3
    • Replies: 1
    • ☆

    I understand Payables and Balance at bank, but don’t understand how to get to the retained earnings figure – in the reconstruction account it says RE is 30, and the c/d figure is 2.76 – is the c/d figure in this case RE?

    October 8, 2015 at 4:35 pm #275562
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23200
    • ☆☆☆☆☆

    Yes, the 30,000 brought down in the question is shown in the Reconstruction Account (debit side)

    The 2,760 is the balance on that account after the directors’ plan has been accounted for

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