Accounting treatment of property, plant, and equipment (including a sale) On Jan 01, 01, entity E acquires an automobile for CU 24 that represents an item of property, plant, and equipment in E”s operations. Depreciation is calculated according to the straight-line method. Unexpectedly, the automobile is already sold on Jun 30, 02 for CU 20. Version (a) E is a car rental agency. Each year, […]

Scope of the principle of consistency (a) Useful life of a wind-driven power station of entity E was initially estimated to be 16 years. When preparing the financial statements for a later period, it turns out that repairs are necessary more often than originally expected and that there are more down times than previously expected. (b) Contingent liabilities are disclosed in the notes unless the […]

Revaluation of land – without taking deferred tax into account On Jan 01, 01, entity E acquires land for CU 40. Payment is effected in cash on the same day. The piece of land is measured according to the revaluation model after recognition. Revaluations are carried out on an annual basis. Fair value of the land changes as follows: Dec 31, 01 44 Dec 31, […]

Changes in accounting estimates (a) On Jan 01, 01, entity E acquired a machine (property, plant, and equipment) for CU 100 that was available for use on the same date. The machine”s useful life was originally estimated to be 10 years. At the end of 05 it becomes clear that the entire useful life of the machine is eight years instead of 10 years due […]

i need answers of these question…… Document Preview: Question No. 1 “In medium and large organisations there is usually a significant separation between ownership and management. Owners often face problems in encouraging goal congruence of managers”. Required: In the context of this statement discuss fully the following; Goal congruence. Illustrate your answer with at least two specific examples of situations or circumstances that would foster […]

Retrospective application of an accounting policy On Jan 01, 03, entity E acquired a building for CU 40 that was available for use on the same date. The building meets the criteria for classification as investment property (IAS 40). The building was measured according to the cost model, i.e. taking into account depreciation (IAS 40.56). The useful life of the building is 40 years. At […]

ASSIGNMENT 3: ACCOUNTING CYCLE PART I – The following are the account balances from the Adjusted Trial Balance of SGA Incorporated as of January 31, 2013. Cash 208,000 Rent Expense 5,000 Equipment 25,000 Supplies Expense 9,000 Accumulated Depreciation: equip. 6,000 Salaries Expense 4,000 Unearned Fees 16,000 Utilities Expense 5,000 Interest Receivable 11,000 Fees Earned 180,000 Supplies 13,000 Depreciation expense 2, 000 Accounts Receivable 15,000 Dividends […]

1. Entity A was sued in 01. On Dec 31, 01, it is not clear whether the probability of conviction in the ongoing trial is more than 50%. Shortly after Dec 31, 01, A is convicted. 2. Entity B holds a receivable which is measured at amortized cost according to IFRS 9. Shortly after the reporting period, the debtor files for bankruptcy. 3. In 01 […]

The Du Pont Company, one of the world’s largest chemical companies, provides the following information about a business combination that occurred during 1997 (edited; dollars in millions): Protein Technologies International was purchased on December 1, 1997. PTI is a global supplier of soy proteins and applied technology to the food and paper processing industries. Du Pont common stock shares totaling 22,500,000, with a fair value […]

Current vs. non-current liabilities On Dec 31, 01, the remaining time to maturity of a loan taken up by entity E is 18 months. E”s normal operating cycle is 12 months. Required Assess for each of the following versions, whether the liability has to be classified as current or as non-current in E”s statement of financial position as at Dec 31, 01: (a) No further […]