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Hi Chris,
For the practice question on Klopp Co, from the wording it seems that the trial balance of the Equity Shares ($1) and Share Premium are the balance as of 30 June 20X8, (only the retained earnings is at 30 June 20X7). The notes below then say that there is an issue of 600,000 shares on 1 Jan 2018.
By looking at the dates doesn’t this mean that the trial balance of $2,4000,000 is already inclusive or after the issuance of the 600,000 shares? i.e., that the balance of the Equity Shares ($1) as of 30 June 20X7 should be $2,400,000 minus $600,000 = $1,800,000 instead?
Thanks in advance!
Regards,
TimApologies, I mean the notes then say there is an issue of 600,000 shares on 1 Jan 20X8
Hi Tim,
It says in part (i) of the additional information that the proceeds were credited to the suspense account. This is saying that instead of crediting share capital and share premium that we have credited suspense and so the amounts are not included within the trail balance amounts.
Thanks and enjoy the weekend.
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