- May 25, 2021 at 8:57 pm #621766shaunak22Participant
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Extracts from the accounting records of Andratx Co relating to the year ended 31 December
20X6 are as follows:
Revaluation surplus $230,000
Equity interim dividend paid $12,000
Profit before tax $178,000
Estimated tax liability for year $45,000
8% $1 Preference shares $100,000
Under provision for tax in previous year $5,600
Proceeds of issue of 2,000 $1 equity shares $5,000
Final equity dividend proposed $30,000
What was the total of equity reported in the statement of changes in equity at
31 December 20X6?
the answer is D but htey have not taken the preference share capital into consideration in the statement of changes in equity why is that dont we normally consider preference share capital when preparing statment of changes in equity and why isnt it considered here?May 26, 2021 at 9:07 am #621792John MoffatKeymaster
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The equity shares are the ordinary shares not the preference shares (just as they are referred to in the question).
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