On 30 June 2019 Southside plc purchased 5,000 shares in ABC plc at £10.00 per share. On acquisition, Southside plc classified this investment as 'available-for-sale'. At 30 June 2020 the fair value of the instruments had increased to £14.00. At 30 June 2021 the fair value of the equity instruments had decreased to £13.00. All of the instruments were sold on 30 June 2021. No cividends were declared on those instruments during the time that they were held by Southside plc. At 30 June 2019 the only equity item was paid-up capital of £100,000. The applicable tax rate is 30 per cent. Required: Prepare an extract of the statement of comprehensive income and statement of changes in equity for the reporting period ending 30 June 2021 in which the reclassification adjustment for available for sale investment is detailed. You may show altermative methodology but do not show both methods.

On 30 June 2019 Southside plc purchased 5,000 shares in ABC plc at £10.00 per share. On acquisition, Southside plc classified this investment as 'available-for-sale'. At 30 June 2020 the fair value of the instruments had increased to £14.00. At 30 June 2021 the fair value of the equity instruments had decreased to £13.00. All of the instruments were sold on 30 June 2021. No cividends were declared on those instruments during the time that they were held by Southside plc. At 30 June 2019 the only equity item was paid-up capital of £100,000. The applicable tax rate is 30 per cent. Required: Prepare an extract of the statement of comprehensive income and statement of changes in equity for the reporting period ending 30 June 2021 in which the reclassification adjustment for available for sale investment is detailed. You may show altermative methodology but do not show both methods.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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