4. The shareholders’ equity section of the statement of financial position of Ba
ID: 2591867 • Letter: 4
Question
4. The shareholders’ equity section of the statement of financial position of Baker Ltd. At July 31, 2010 is as follows:
2010
2009
General reserve
55,000
45,000
Revaluation reserve
85,000
70,000
Share Capital
$220,000
$175,000
Retained earnings
175,000
165,000
$535,000
$455,000
Additional information:
Baker issued 18,000 shares at $2.50 each on June 30, 2010 for cash.
A transfer of $10,000 was made from retained earnings to the general reserve.
Comprehensive income for the year was $150,000, including a revaluation gain of $15,000 net of tax.
Dividends for the year comprised: Interim dividends of $55,000 and final dividends provided of $60,000.
Required: Prepare the statement of changes in equity of Baker Ltd. For the year ended July 31, 2010 in accordance with IAS 1.
2010
2009
General reserve
55,000
45,000
Revaluation reserve
85,000
70,000
Share Capital
$220,000
$175,000
Retained earnings
175,000
165,000
$535,000
$455,000
Explanation / Answer
Particulars Share capital Retained earnings Revaluation surplus General reserve Total equity Balance at Aug 1, 2010 1,75,000 1,65,000 70,000 45,000 4,55,000 Changes in accounting policy - - - - - Correction of prior period error - - - - - Restated balance 1,75,000 1,65,000 70,000 45,000 4,55,000 Changes in equity for the year Issue of common stock 45,000 45,000 Transfer to general reservce -10,000 10,000 - Comprehensive income for the year 1,35,000 15,000 1,50,000 Interim dividends for the year -55,000 -55,000 Final dividends for the year -60,000 -60,000 - Balance at Jul 31, 2010 2,20,000 1,75,000 85,000 55,000 5,35,000
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