ACCA Applied Skills · Financial Reporting · Reporting financial performance
Orion Co's financial statements for the year ended 30 June 20X6 show: revenue $2,000,000, profit for the year $240,000, other comprehensive income: revaluation surplus $50,000 and loss on FVOCI equity investments $(20,000). Opening equity was $1,000,000. Orion issued shares for $150,000 and paid dividends of $80,000 in the year. What is closing equity?
Closing equity is $1,340,000. Total comprehensive income is $270,000 (profit 240,000 plus 50,000 less 20,000 OCI). Adding the $150,000 share issue and deducting the $80,000 dividend from opening equity of $1,000,000 gives this total.
- A$1,340,000Correct
- B$1,320,000
- C$1,400,000
- D$1,370,000
Explanation
Total comprehensive income = 240,000 + 50,000 - 20,000 = 270,000. Closing equity = 1,000,000 + 270,000 + 150,000 - 80,000 = 1,340,000. Using only profit would give 1,310,000, and ignoring the dividend or share issue gives the other figures.
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