Page 17 - LILITED LIABILITY COMPANIES - INTERMEDIATE

COMPANY ACCOUNTING SESSION 14

1.14 EXAMPLE – STATEMENT OF CHANGES IN EQUITY

A.B.C. Ltd has an Ordinary Share Capital of 80,000 ordinary shares of €1.

The net profits for the first two years of business ended 31 December are :
20X4 -- €11,952
20X5 -- €15,728

Transfers to reserves are made as follows:
20X4 -- nil;
20X5 -- general reserve -- €1,000;

Dividends were paid for each year on the ordinary shares at:
20X4 -- 10 per cent;
20X5 -- 12 per cent;

Solution

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31/12/X4
Share Retained Total
capital earnings
€ € €
Profit for the period 11,952 11,952
Dividends (8,000) (8,000)
Transfer
Issue of share capital 80,000 80,000
Balance at 31/12/x4 80,000 3,952 83,952

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31/12/X5
Share General Retained Total
capital Reserve earnings
€ € € €
Balance at 01/01/x5 80,000 3,952 83,952
Profit for the period 15,728 15,728
Dividends (9,600) (9,600)
Transfer 1,000 (1,000)
Balance at 31/12/x5 80,000 1,000 9,080 90,080

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