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Financial Accounting Test: Equity Changes

The document outlines a class test for Financial Accounting and Reporting at SKANS School of Accountancy, focusing on a listed company, Fu-tech (Pakistan) Limited. It includes financial data for the company, such as shareholders' equity, profit after tax, misappropriated inventories, and dividend information, along with questions requiring the preparation of a statement of changes in equity and multiple-choice questions related to accounting treatments. The test is structured to assess students' understanding of financial reporting in accordance with the Companies Ordinance, 1984.

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Gayyur Ahmed
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2 views1 page

Financial Accounting Test: Equity Changes

The document outlines a class test for Financial Accounting and Reporting at SKANS School of Accountancy, focusing on a listed company, Fu-tech (Pakistan) Limited. It includes financial data for the company, such as shareholders' equity, profit after tax, misappropriated inventories, and dividend information, along with questions requiring the preparation of a statement of changes in equity and multiple-choice questions related to accounting treatments. The test is structured to assess students' understanding of financial reporting in accordance with the Companies Ordinance, 1984.

Uploaded by

Gayyur Ahmed
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

SKANS School of Accountancy

FINANCIAL ACCOUNTING AND REPORTING


Class Test 6 (SOCE)

Tutor: Abdul Salam Total Marks: 15 Marks


Date: 25-11-2025 Time Allowed: 30 Mins
Note: Use Black pen only. Attempt every question & Part of question on new page.

Question 01:
The following information pertains to a listed company, Fu-tech (Pakistan) Limited.
a) Shareholders' equity as at 1 January 2023:
Share capital (Rs. 10 each) Rs. 116 million
Retained earnings Rs. 58 million

b) Profit after tax for the year ended 31 December 2023 amounted to Rs. 47 million. (2022: Rs. 38 million)
c) In May 2023 the management discovered that inventories costing Rs. 18 million have been misappropriated. The
entire loss has been recorded in 2023. However, it is estimated that inventories costing Rs. 13 million and Rs. 5 million
were misappropriated in the years 2022 and 2023 respectively.
d) Depreciation expense for the year ended 31 December 2023 included incremental depreciation amounting to Rs. 6.5
million on account of revaluation surplus (means transfer the surplus to retained earnings).
e) Right shares were issued on 15 September 2023 at Rs. 12 per share in the ratio of 1 right share for every 4 shares
held by the shareholders of the company.
f) Dividend information is as under:
2023 2022 2021
Cash dividend- Interim*
18% - 10%

Cash dividend - Final


14% 15% -

Bonus shares - Final


- - 16%

*Interim dividend was announced before the issue of right shares.


Applicable tax rate for the company is 34%.
Required:
Prepare a statement of changes in equity for the year ended 31 December 2023 in accordance with the
requirements of the Companies Ordinance, 1984. (Show comparative figures) (13)
Question 02:
Select the most appropriate answer from the options available for each of the following Multiple-Choice Questions.
1) Pharmaceutical company issues bonus shares of Rs. 100,000 as dividend. How is this reflected in the SOCE?
A. Increase in share capital and decrease in retained earnings
B. Increase in retained earnings and decrease in share capital
C. No change in total equity or SOCE
D. Adjusted only through statement of cash flows (01)
2) Which of the following is the correct accounting treatment for a bonus issue through capitalization of reserves?
A. Increase in share capital and decrease in total equity
B. Decrease in retained earnings or reserves, increase in share capital, no change in total equity
C. Increase in retained earnings and share capital
D. Increase in total equity (01)

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