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ACCA Applied Skills · Financial Reporting · Preparation of single entity financial statements

Ladon Co's profit for the year was $500,000. Other comprehensive income comprised a gain on revaluation of land of $80,000 and a loss of $30,000 on remeasurement of a defined benefit plan; both figures are stated net of tax. Dividends paid were $120,000. What is total comprehensive income for the year?

Total comprehensive income is $550,000, being profit of $500,000 plus the revaluation gain of $80,000 less the $30,000 remeasurement loss. Dividends are distributions to owners shown in the statement of changes in equity, so they are not deducted.

  1. A$550,000Correct
  2. B$430,000
  3. C$470,000
  4. D$580,000

Explanation

Total comprehensive income = 500,000 + 80,000 - 30,000 = $550,000. Dividends are a transaction with owners shown in the statement of changes in equity, not in comprehensive income. Deducting them gives $430,000, which is wrong.

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