How to record in financial statement

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Reference no: EM132672139

Problem 1: How to record this in financial statement?

(1) On 1 January 2009 Adeje Ltd issued 60,000 6% £1 irredeemable preference shares at par. The payment of the dividend is at the discretion of Adeje Ltd. The appropriate dividend in respect of these shares was paid on 30 June 2009 and was recognised as a finance cost in arriving at the draft profit before tax for the year.

(2.) During the year ended 30 June 2009 Adeje Ltd decided to buy back some of its ordinary shares. On 1 March 2009 it reacquired 200,000 of its ordinary shares for £2 per share. The shares had originally been issued at a premium of 30p per share. Adeje Ltd recognised the £400,000 cash paid and debited it against share capital and share premium.

3.) During the year to 30 June 2009 Adeje Ltd changed its method of inventory valuation from weighted average to FIFO. Inventory at 30 June 2009 was correctly valued on the FIFO basis. Closing inventory at 30 June 2008 was reported as £37,000 valued at weighted average; however if it had been valued using FIFO it would have been £39,000

Reference no: EM132672139

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