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You are provided balances as extracted from the books of Malindi Ltd. on 31 Dec. 2012:...

You are provided balances as extracted from the books of Malindi Ltd. on 31 Dec. 2012:

Sh. 000

Ordinary share capital (Sh. 5 per value)

800

P & L Reserve

64

Revaluation Reserve

100

Share premium

150

          The information below relates to the year to 31 Dec. 2013:

  1. A bonus issue of shares was made on 1 Feb. 2013 at 1 share for every 8 issued shares out of the share premium account.

  1. During the audit of the financial statement it was realized that the closing stock for the year ended 31 Dec. 2011 had been overvalued by Sh. 36,000.

  1. An interim dividend of 20 cents per share was paid for all the outstanding shares on 1 July 2013 (including the shares relating to the bonus issue).

  1. Malindi Ltd. made profit after tax amounting to Sh. 24,800 for the year ended 31 Dec. 2013.

Required:

Prepare a statement of changes in equity for the year ended 31 Dec. 2013.             

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Answer #1
STATEMENT OF CHANGES IN EQUITY
Name of the Company Malindi Ltd.
Statement of Changes in Equity for the period ended 31 Dec. 2012
Other Equity (Sh. 000)
Particulars Securities Premium Reserve Profit and Loss Reserve Revaluation Reserve Total
A. Balance at the beginning of the reporting period (1st January 2013)            150.00              64.00            100.00            314.00
B. Changes in accounting policy or prior period errors
(Due to overvalued closing stock)		             (36.00)             (36.00)
C. Restated balance at the beginning of the reporting period (A-B)            150.00              28.00            100.00            278.00
D. Total Comprehensive Income for the year              24.80              24.80
E. Interim Dividends (180000 shares*20 cents per share)             (36.00)             (36.00)
F. Transfer to retained earnings                    -  
G. Issue of 20000 Bonus shares at Sh. 5 each           (100.00)           (100.00)
Balance at the end of the reporting period (C+D-E-F-G)              50.00              16.80            100.00            166.80
Equity Share Capital (Sh. 000)
Balance at the
beginning of the
reporting period (1st January 2013)		 Changes in equity
share capital during the year		 Balance at the end of
the reporting period
                                             800                                              100                                              900
(160000 shares @sh. 5 each) (20000 shares @sh. 5 each) (180000 shares @sh. 5 each)
No. of Bonus Share issued = (Sh. 800000 ÷ Sh. 5 per share)*(1 bonus share for every 8 shares issued) = 20000 Bonus shares
Share Premium Reserve transferred to share capital for bonus issue = Sh. 100,000
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