Unilever Ltd has the following trial balance as at 31 December 2019: Debit Credit $’000 $’000 Cash at bank 100 Inventory at 1 January 2019 2400 Administrative expenses 2206 Distribution costs 650 Non-current assets at cost Buildings Plant and equipment Motor vehicles 10000 1400 320 Suspense 1500 Accumulated depreciation Buildings Plant and equipment Motor vehicles 4000 480 120 Retained earnings 560 Trade receivables 876 Purchases 4200 Dividend paid 200 Sales revenue 11752 Long term loan 1390 Trade payables 1050 Share premium 500 $1 Ordinary shares 1000 22352 22352 Additional information: Inventory as at 31 December 2019 was valued at $1,600,000. While doing the inventory count, errors in the previous year’s inventory count were discovered which affected the balance of $2,400,00 brought forward at the start of the year. This should have been $2,200,000 instead. The profit for the period was $3,246,000 after adjustments for accrued expenses amounting to $120,000 and depreciation at 10% per annum reducing balance on all non-current assets. No final dividend was proposed. 1 million new ordinary shares were issued at $1.50 on 1 December 2019 and the in the interest of time, the proceeds were posted to a suspense account. Approval was given for $1,500,000 to be transferred from retained earnings to general reserve. You are required to: Prepare a statement of changes in equity for the year ended 31 December 2019.

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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Unilever Ltd has the following trial balance as at 31 December 2019:

	Debit	Credit
	$’000	$’000
Cash at bank	100
Inventory at 1 January 2019	2400
Administrative expenses	2206
Distribution costs	650
Non-current assets at cost Buildings Plant and equipment Motor vehicles	10000 1400 320
Suspense		1500
Accumulated depreciation Buildings Plant and equipment Motor vehicles		4000 480 120
Retained earnings		560
Trade receivables	876
Purchases	4200
Dividend paid	200
Sales revenue		11752
Long term loan		1390
Trade payables		1050
Share premium		500
$1 Ordinary shares		1000
	22352	22352

Additional information:

Inventory as at 31 December 2019 was valued at $1,600,000. While doing the inventory count, errors in the previous year’s inventory count were discovered which affected the balance of $2,400,00 brought forward at the start of the year. This should have been $2,200,000 instead.
The profit for the period was $3,246,000 after adjustments for accrued expenses amounting to $120,000 and depreciation at 10% per annum reducing balance on all non-current assets.
No final dividend was proposed.
1 million new ordinary shares were issued at $1.50 on 1 December 2019 and the in the interest of time, the proceeds were posted to a suspense account.
Approval was given for $1,500,000 to be transferred from retained earnings to general reserve.

You are required to:

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

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