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Case 2: Reporting shareholders’ equity (5 marks) Vinabread Ltd had the following equity account on 1...

Case 2: Reporting shareholders’ equity

Vinabread Ltd had the following equity account on 1 July 2020:

Share Capital (100,000 shares) 1,800,000

Retained Earnings $ 960,000

General Reserve $ 100,000

Vinabread Ltd’s profit for the year ending 30 June 2020, which has not been included in the retained earnings was $180,000. During the year, the following transactions and events occurred:

July 15, 2020 Declared and paid interim dividend of $0.50 per share.

July 30, 2020 Effected 3 for 1 share split,

June 30, 2021 Declared a final cash dividend of $0.30 per share and transferred $20,000 from retained earnings to general reserve.

Required: Prepare the equity section of the statement of financial position of Vinabread Ltd as at 30 June 2021.

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Expert Solution

Vinabread Ltd
a No of outstanding common shares on Jul 15                     100,000
b. Total interim dividend paid @$0.5/share on Jul 15=                    50,000.0
c No of outstanding common shares on Jul 30 after 3 for 1 share split =                     300,000
d June 30,2021 total cash dividend declared @$0.3 =                    90,000.0
Retained Earning statement :
Opening balance Jul 1,2020 $                 960,000
Add , Earning fr the year ended Jun 30,2020 $                 180,000
Less Interim dividend paid Jul 15,2020 $                   50,000
Less Final dividend paid Jun30,2021 $                   90,000
Less : Transfer to Gen reserve on Jun 30,2021 $                   20,000
Closing balance Jun 30,2021 $                 980,000
Vinabread Ltd
Partial Balance Sheet as on Jun 30.2021.
Equity Section
Share Capital (300,000 issued, $6 par value) $              1,800,000
General Reserve $                 120,000
Retained Earning $                 980,000
Total Equity $              2,900,000

jeff jeffy answered 1 year ago
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