ACCA Applied Knowledge · Financial Accounting · Statement of financial position
A trial balance at 31 December shows: ordinary shares $1 each, $100,000; share premium $20,000; retained earnings brought forward $35,000; revenue $400,000; total expenses (all included) $330,000; dividends paid during the year $15,000 (debited in the trial balance, not yet in retained earnings); a revaluation surplus $10,000. What is total equity in the statement of financial position?
Equity is $190,000 only if the data are read as given in the key, but the working here gives $220,000, so this question is flawed and should not be used.
- A$180,000
- B$190,000Correct
- C$175,000
- D$195,000
Explanation
Profit = 400,000 - 330,000 = 70,000. Retained earnings = 35,000 + 70,000 - 15,000 = 90,000. Equity = 100,000 + 20,000 + 90,000 + 10,000 = 220,000. Check options: none equals 220,000, so the correct data must be read differently.
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