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On 30 June 2019 Southside plc purchased 5,000 shares in ABC plc at £10.00 per share. On acquisition, Southside plc classified this investment as 'available-for-sale'. At 30 June 2020 the fair value of the instruments had increased to £14.00. At 30 June 2021 the fair value of the equity instruments had decreased to £13.00. All of the instruments were sold on 30 June 2021. No cividends were declared on those instruments during the time that they were held by Southside plc. At 30 June 2019 the only equity item was paid-up capital of £100,000. The applicable tax rate is 30 per cent. Required: Prepare an extract of the statement of comprehensive income and statement of changes in equity for the reporting period ending 30 June 2021 in which the reclassification adjustment for available for sale investment is detailed. You may show altermative methodology but do not show both methods.

On 30 June 2019 Southside plc purchased 5,000 shares in ABC plc at £10.00 per share. On acquisition, Southside plc classified this investment as 'available-for-sale'. At 30 June 2020 the fair value of the instruments had increased to £14.00. At 30 June 2021 the fair value of the equity instruments had decreased to £13.00. All of the instruments were sold on 30 June 2021. No cividends were declared on those instruments during the time that they were held by Southside plc. At 30 June 2019 the only equity item was paid-up capital of £100,000. The applicable tax rate is 30 per cent. Required: Prepare an extract of the statement of comprehensive income and statement of changes in equity for the reporting period ending 30 June 2021 in which the reclassification adjustment for available for sale investment is detailed. You may show altermative methodology but do not show both methods.

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 26E
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On 30 June 2019 Southside plc purchased 5,000 shares in ABC plc at £10.00 per share. On acquisition, Southside plc classified this investment as 'available-for-sale!. At 30 June 2020 the fair value of the instruments had increased to £14.00. At 30 June 2021 the fair value of the equity instruments had decreased to £13.00. All of the instruments were sold on 30 June 2021. No dividends were declared on those instruments during the time that they were held by Southside plc. At 30 June 2019 the only equity item was paid-up capital of £100,000. The applicable tax rate is 30 per cent. Required: Prepare an extract of the statement of comprehensive income and statement of changes in equity for the reporting period ending 30 June 2021 in which the reclassification adjustment for available for sale investment is detailed. You may show alternative methodology but do not show both methods.
Transcribed Image Text:On 30 June 2019 Southside plc purchased 5,000 shares in ABC plc at £10.00 per share. On acquisition, Southside plc classified this investment as 'available-for-sale!. At 30 June 2020 the fair value of the instruments had increased to £14.00. At 30 June 2021 the fair value of the equity instruments had decreased to £13.00. All of the instruments were sold on 30 June 2021. No dividends were declared on those instruments during the time that they were held by Southside plc. At 30 June 2019 the only equity item was paid-up capital of £100,000. The applicable tax rate is 30 per cent. Required: Prepare an extract of the statement of comprehensive income and statement of changes in equity for the reporting period ending 30 June 2021 in which the reclassification adjustment for available for sale investment is detailed. You may show alternative methodology but do not show both methods.
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