Question

ABC Corp. is a public company with a December year end date. The following select balances...

ABC Corp. is a public company with a December year end date.

The following select balances are taken from the December 31, 2018 balances.

Capital stock 160,000 credit

Retained earnings 567,000 credit

Equity portion of convertible bonds 6,000 credit

Goodwill 18,000 debit

Cash flow hedge loss 65,000 debit

Investment in foreign subsidiary 92,300 debit

Translation differential from foreign subsidiary 13,000 credit

Short term investments 26,000 debit

Provision for lawsuit 44,000 credit

Contributed surplus – premium on common shares 25,500 credit

Copyrights 7,700 debit

Actuarial gain on defined benefit pension plan 29,000 credit

The following transactions occurred during 2019.

1. Net loss was 19,000

2. The entire balance of copyrights written off

3. Convertible bonds transferred to equity portion was 15,000

4. An accounting policy change resulted in an increase to prior year earnings by 22,000

5. Provision for lawsuit increased by 3,500

6. Capital stock issued for 50,000

7. Dividends declared (and unpaid and year-end) 35,000

8. The translated amount of ABC Corp’s foreign subsidiary investment declined by 1,000.

Required: Prepare a statement of changes in equity for the year ended December 31, 2019.

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Ans :

Statement of changes in equity for ABC Corp. for the year ended 31 December 2019

$

$

Net Income

(19000)

Less: Loss in value/loss

    (i) Copyrights Written off

7700

    (ii) Currency Translation Loss

1,000

(8700)

Less: Increase in Provision for lawsuit

(3500)

Less: Dividend declared

(35,000)

Add: Accounting Policy Change effect

22,000

Add : New Share Capital Issued

(i) Additional Bonds Converted to equity

15,000

(ii) Capital stock issued

50000

75000

Opening Balance Share Capital & Reserves

727000

( 160000 + 567000)

Stockholders Equity (Restated Amount)

757800
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