Homework Answers
The statements which are true :
OPTIONS A, B and D
or
OPTIONS A, B, C, and E
Explanation
The statement about material errors involving property, plant nad equipments and intangible assets are true :
- A disclosure note is needed.
- All related account balances must be corrected.
- Previous years financial statements must be retrospectively restarted.
In this question if the OPTION E is selected i.e the previous years financial statements must be prospectively restated, then OPTION C will also required to be selected i.e if retained earnings requires correction, the correction is reported during the current period.
Hence, the statements which are true are either OPTIONS A, B and D or OPTIONS A, B, C and E.
Also, the financial statements always requires a disclosure note and related accounts must be corrected in case of any material errors involving property, plant and equipment and intangible assets.
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QUESTION THREE [20]
The following information relating to property plant and equipment
was extracted from
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1. Balances at 28 February 2018:
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- Accumulated depreciation: equipment R 10 860
- Vehicles at cost R560 000
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QUESTION THREE [20]
The following information relating to property plant and equipment
was extracted from
the accounting records of Sandile’s Supermarket:
1. Balances at 28 February 2018:
- Equipment at cost R 56 000
- Accumulated depreciation: equipment R 10 860
- Vehicles at cost R560 000
- Accumulated depreciation: vehicles R285 360
2. The following transactions in respect of property, plant and
equipment took place
during the current financial year:
2.1 An old vehicle was sold on 31 August...
Recording Error Corrections Related to Equipment On April 1, 2021, the following 2020 errors were discovered after the 2020 financial statements were issued. a. Equipment purchased on January 1, 2020, with a cost of $28,000, salvage value of $1,680, and useful life of 8 years was incorrectly expensed as maintenance cost. The company uses the straight-line method to depreciate all equipment b. In 2020, fully depreciated equipment with an original cost of $35,000 and no salvage value was sold for...
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