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Undeniably, profitability is the ultimate goal of companies and readers of a company’s financial statements are...
A. Undeniably, profitability is the ultimate goal of companies and readers of a company’s financial statements are very much interested in the reported profit figure. The profit figure is achieved by the preparation of the statement of profit or loss and the statement of financial position. If the foregoing is the case, why then bother about the statement of cash flows? B. Globally, accounting standards are developed based on different methods. It is generally agreed that the nature of accounting...
SCENARIO SIX Funama Limited borrowed K800,000 on 1st January 2014 from Palama Bank. The loan attracts interest rate of 10% per annum. The loan was for the construction of its office block. Construction commenced on 1st April 2014 and is likely to be completed on 31st March 2016. On 30th September 2014, construction works were suspended because of striking construction workers. However, construction works resumed on 1st January 2015. Note: Interest for the year to 31st December 2014 has been...
question 2 question Requiredi Advise Caba Limited on how the above transaction shouid be treated in its financial statements for the year ended 31 March 2016 in accordance with international accounting standards (10 marks) Question 2 A piece of machine was purchased on 1 January 2014 at a cost of K1,200,000. It s depreciated at 25% its economic useful life. It is company policy to review machines for impairment annually. was reviewed for impairment on 31 December 2014 and the...
On January 13, 2018 Astra Ltd is preparing to close its financial statements for the year 2017. At that date is has calculated the following accruals for 2017: Electricity for December 2017 $2,000 Water for December $650 Audit fees for the year 2017 $5,500 On March 13 2018, it has paid the above expenses in full, however audit fees actually paid were $5,000 since the auditors decided to give a discount to the company. Required: Prepare the journal entries for...
JANUARY 2019. QUESTIONS Urban plc, a company that prepares its a company that prepares its financial statements to 31 December cach year involved in the construction and repair of city centre student accommod e r of inancial statements for the year ended 31 December 2018 can be finalised, outstanding issues need to be resolved. outstanding icments for them and repair of ancial staten need to be resor ended 31 Decennice stude ntre student accommodation. Before the succesusly and Urbcontract. The...
Urban ple, a company that prepares its financial statements to 31 December each year, is involved in the construction and repair of city centre student accommodation. Before the financial statements for the year ended 31 December 2018 can be finalised, a number of outstanding issues need to be resolved. Issue 1: In early January 2019, a customer commenced legal action against Urban plc alleging that construction work completed in September 2018 had not been carried out in accordance with the...
Part A: (8 Marks) The 31 December 2018 financial statements of Grape Ltd have been prepared in draft form. However, the accounts have not yet been printed and sent to shareholders. Subsequent to reporting date, the following events occur: On 20 January 2019, the directors recommend a final dividend of $2 per share. The company received an invoice from a supplier for $85,000 on 25 January 2019 for goods delivered in December 2018. The goods were included in closing inventory...
Question 4 (30 marks) Sunlight Property Development Limited (Sunlight) is a company which acquires and develops significant properties. The company holds a diversified property portfolio, including hotels, office buildings, and leisure centres. Some of these properties are used by the company for providing services or for administrative purpose, while some of them are for rental purpose. One of the commercial buildings, namely Building A, will be redeveloped into a 50-storey office tower (the construction project). The construction is expected to...
2. Yau deposited $2,000 in his bank account twice: on 1st January 2015 and on 1st January 2017. There were no other deposits or withdrawals and the amount of money in the account at the end of 31st December 2018 is $7,100. Assume interest is compounded annually. What is the effective rate of interest he earned each year?
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019. Expenditures on the project were as follows: January 1, 2018 $ 2,020,000 March 1, 2018 1,740,000 June 30, 2018 1,940,000 October 1, 2018 1,740,000 January 31, 2019 441,000 April 30, 2019 774,000 August 31, 2019 1,071,000 On January 1, 2018, the company obtained a $4,900,000 construction loan with a 12% interest rate....