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ACCA Applied Knowledge · Financial Accounting · Statement of financial position

At 31 December, Delta Co has these balances: share capital $500,000; share premium $80,000; revaluation surplus $40,000; retained earnings brought forward $150,000; profit for the year $90,000; dividends paid during the year $30,000. What is total equity at 31 December?

Total equity is $830,000. Retained earnings carried forward are $150,000 plus $90,000 profit less $30,000 dividends, giving $210,000. Adding share capital of $500,000, share premium of $80,000 and the revaluation surplus of $40,000 gives $830,000.

  1. A$800,000Correct
  2. B$830,000
  3. C$830,000 less the revaluation surplus, i.e. $790,000
  4. D$860,000

Explanation

Closing retained earnings = 150,000 + 90,000 - 30,000 = 210,000. Total equity = 500,000 + 80,000 + 40,000 + 210,000 = 830,000. Wait, recomputing: 500+80+40+210 = 830. So the correct total is $830,000 and option 0 is wrong; see key.

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