Fair Value Through OCI FVOCI On Sale of Shares 30 June 20x4 Selling Price 38000

Fair value through oci fvoci on sale of shares 30

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Fair Value Through OCI (FVOCI) On Sale of Shares – 30 June 20x4 Selling Price $38,000 $ 3,000 $3,000 $7,000 31 Journal Entry Cr Investment in FVOCI $38,000 Investment in FVOCI $ 31,000 FV Reserve $4,000 $ 4,000 $38,000 Fair Value Through OCI (FVOCI) On Sale of Shares – 30 June 20x4 Selling Price $38,000 $ 3,000 $3,000 $7,000 Dr Cash $38,000 $38,000 32 Journal Entry Cr Retained Earnings $7,000 FV Reserve $4,000 Fair Value Through OCI (FVOCI) On Sale of Shares – 30 June 20x4 Selling Price $38,000 $3,000 $7,000 Dr FV Reserve $7,000 $7,000
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33 31/12/x3 30/06/x4 Total Gain Capital Gains Earned Selling Price $38,000 Cost $31,000 Profit $7,000 Gain never recognised in profit or loss statement Fair Value Through OCI (FVOCI) 34 31/12/x3 30/06/x4 Total FVOCI 31/12/x3 15/01/x4 Total FVPL $4,000 $3,000 $7,000 Gain recognised over two periods Fair Value Through OCI (FVOCI) Gain never recognised in profit or loss statement Accounting for Dividends Received - Dividend is a distribution of profits to shareholders - Shareholders are the company’s owners/ investors - An investor treats dividend as an income 35 - On 1 May 20X4, M Ltd purchased 1,000 shares in Y Ltd. Accounting for Dividends Received Illustration: - On 30 June 20X4 Y Ltd declared dividends of $3/- per share. - Payment is received by M Ltd on 31 July 20X4. 36
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Accounting for Dividends Received On 30 June 20x4 37 Journal entries Dr. Dividend Receivable $3,000 Cr. Dividend Income $3,000 Statement of Profit or Loss $3,000 Accounting for Dividends Received On 31 July 20x4 38 Journal entries Cr. Dividend Receivable $3,000 Dr. Cash $3,000 Accounting for Dividends Received 39 Dividend Income M Ltd Assets Liabilities Equity + = Share Cap Retained Earnings Other Reserves + + Income Expense Dividend - - Y Ltd Distribution of profits Impact on the Accounting Equation Investor Issuer END Anil J N Shukla
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