Solution 9.1: Solutions To Gripping IFRS: Graded Questions Income Statement Disclosure

Solutions to Gripping IFRS : Graded Questions
Income statement disclosure
Solution 9.1
(a)
ST KITTS LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY20X7 Notes Revenue Cost of sales Operating expenses Finance costs Profit before tax Income tax expense Profit for the period Other comprehensive income Revaluation surplus Total comprehensive income
(7 100 000 + 80 000) (3 480 000 + 120 000)
(W2)
4 5
20X7 C 12 000 000 (7 180 000) (3 600 000) (240 000) 980 000 (284 200) 695 800 800 000 1 495 800
(b)
ST KITTS LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 28 FEBRUARY 20X7 Ordinary share Share capital premium C C Balance at 01/03/X6 2 500 000 Total comprehensive income Issue of share capital 500 000 1 500 000 Share issue expenses (150 000) Balance at 28/02/X7 3 000 000 1 350 000
NDR C 800 000
Retained earnings C 1 424 200 695 800
Total C 3 924 200 1 495 800 2 000 000 (150 000) 7 270 000
800 000
2 120 000
(c) ST KITTS LIMITED (EXTRACT FROM) STATEMENT OF FINANCIAL POSITION AT 28 FEBRUARY 20X7 Note C ASSETS Current assets Inventories 1 720 000 Trade and other receivables (980 000 + 15 000) 925 000 Cash and cash equivalents 2 059 200 4 779 200 EQUITY AND LIABILITIES Current liabilities Borrowings Trade and other payables Current tax payable 2 000 000 420 000 84 200 2 504 200
(400 000 + 20 000) (284 200 200 000)
Kolitz & Sowden-Service, 2009
Chapter 9: Page 1
Chapter 9: Page 2

(d)
ST KITTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 20X7 1. Statement of compliance These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan. Approved accounting standards comprises of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 198, provisions of and directives issued under the Companies Ordinance, 1984. In case the requirements differ, the provision of the Companies Ordinance, 1984 shall prevail. Accounting policies Basis of preparation The financial statements have been prepared using the historic cost basis, except for the revaluation of certain property, plant and equipment. Share capital Authorised 10 000 000 ordinary shares of C0.50 each Issued 6 000 000 ordinary shares of C0.50 each Reconciliation of quantity of shares Balance 1/3/X6 Issued during year Balance 28/2/X7 4. Profit before tax The profit before tax has been computed after taking into account the following: Auditors remuneration Depreciation of property, plant and equipment Employee benefits expense (1 800 000 - 1 700 000) Write down of inventory to net realisable value Income tax expense Current normal tax Income tax expense Tax rate reconciliation: Applicable tax rate Tax effects of Profit before tax Income tax expense Effective tax rate 6. C
2. 2.1
3 000 000 Qty 5 000 000 1 000 000 6 000 000
110 000 210 000 1 800 000 100 000
5.
284 200 284 200
29%
(980 000 X 0.29)
284 200 284 200 29%
Dividends of C300 000 have been declared on 25 March 20X6 but have not been recognised as a distribution. The DPS amounts to C0.05 per share.
Chapter 9: Page 3
Solution 9.1 continued

Workings
W1 Calculation of accounting / tax profit on sale of plant
Accounting 330 000 (180 000) 150 000 Tax 330 000 (180 000) 150 000
Selling price Carrying amount / tax base
W2. Current tax computation
Profit before tax Current tax payable

(960 000 X 0,29)
980 000 278 400
Chapter 9: Page 4
Solution 9.2
WORLD LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 20X2 Note Sales Cost of sales Gross profit Income from subsidiaries Other income Royalty income Investment income Administrative & selling expenses Distribution expenses Other operating expenses Finance costs Profit before tax Income tax expense Profit for the period Other comprehensive income Total comprehensive income 2 20X2 C 84 986 750 (24 602 000) 60 384 750 2 050 000 175 000 430 000 (1 277 100) (185 400) (43 285 250) (367 500) 17 924 500 (4 604 850) 13 319 650 13 319 650
(1 150 000 + 900 000)
2/4 2 2
(1 327 100 - 50 000)
3,6
(5 054 850 + 200 000 - 450 000)
NOTES TO FINANCIAL STATEMENTS 1. Accounting policies
1.1 Statement of compliance These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan. Approved accounting standards comprises of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 198, provisions of and directives issued under the Companies Ordinance, 1984. In case the requirements differ, the provision of the Companies Ordinance, 1984 shall prevail. 1.2 Basis or preparation The financial statements have been prepared in the historical cost basis. These policies are consistent in all material respects with these applied in the previous years. 1.3 Revenue Revenue is measured at the fair value of the consideration received or receivable net of VAT. Revenue consists of sales of goods, royalties, dividends and interest income. . 2. Revenue and other income Sale of goods Interest Royalties Dividend C 84 986 750 430 000 175 000 1 150 000 86 741 750
Chapter 9: Page 5

3. Operating expenses The operating expenses are calculated after taking into account the following:
Audit fees - For audit - Consulting - Other expenses Depreciation Operating lease expenses Staff costs Bad debts expense Impairment of inventory 237 500 212 000 12 500 13 000 2 430 000 1 602 500 31 008 250 975 000 1 307 500
[2 405 000 + (250 000 * 0.15 * 8 / 12)] [300 000 + 26 934 000 + 2 178 720 (0,08x27 234 000) + 1 433 530 + 32 000 + 130 000]
4. Income from subsidiaries

Dividends Management fee 1 150 000 900 000 2 050 000
5. Tax
Normal tax Current Deferred Overprovision in previous year Income tax expense Tax rate reconciliation Tax expense on profit / Applicable rate Dividend income exempt Donations disallowed Overprovision in previous year Income tax expense / Effective rate C 5 377 350 (345 000) 22 500 (450 000) 4 604 850 % 30,00 (1,92) 0,12 (2,51) 25.69 4 754 250 300 600 (450 000) 4 604 850
Chapter 9: Page 6
Chapter 9: Page 7

Workings
Other operating expenses Audit fees Bad debt expense Depreciations expense Donations Impairment of inventory Maintenance of industrial plant Operating lease expenses Salaries expense
(2 405 000 + 25 000)
(2 465 000 - 250 000)
237 500 1 180 000 2 430 000 75 000 1 307 500 2 215 000 1 602 500 34 237 750 43 285 250
Tax computation Profit before tax Permanent differences Dividend income Donations 17 924 500 (1 150 000) 75 000 16 849 500 (1 002 000) 2 430 000 (3 382 000) (50 000) 15 847 500
X.30
Temporary differences
Depreciation Tax allowance Prepaid expense Taxable income
5 054 850 300 600
Dr TE Cr DT
4 754 250
Dr TE Cr CTP
Chapter 9: Page 8
Solution 9.3
a) Deferred taxation calculation CA Balance at 01/04/X3 Rate change Rates prepaid Royalties in advance Manufacturing plant Motor vehicles Computer equipment Furniture Balance at 31/03/X4 40 (10) 2 000 1 000 500 500 4 030 0 0 1 050 1 200 300 230 2 780 TB TD 1 000 Rate 35% -5% 30%
Taxable Deductible Taxable Deductible Taxable Taxable
DT 350 (50) 300
40 (10) 950 (200) 200 270 1 250
375
b) ELECTORAL LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 20X4 Revenue from sales Cost of sales Gross profit Other income Distribution costs Administration expenses Other operating expenses Finance costs Profit before tax Income tax expense Profit for the period Other comprehensive income Total comprehensive income Note 2
(7 500 - 2 000) (1 500 + 120 + 12 + 140 + 110 + 35 + 5 000)
(2 807 + 25 - 40)
3 4
C'000s 7 500 (5 500) 2 000 6 917 (1 200) (1 000) (2 792) (250) 3 675 (1 057.5) 2 616.5 2 617.5
NOTES TO THE FINANCIAL STATEMENTS AT 31 MARCH 20X4

2. Revenue and other income Sale of goods Services rendered Royalties received Interest received Profit on sale of plant Dividends received - listed - unlisted Rent received Total revenue C000s 7 500 5 000 120 152 110 15 20 1 500 6 917 14 417
(10 000 X 12) [(100 000 X 0,12) + 140 000]
(300 000 X 0,05)
Chapter 9: Page 9
Chapter 9: Page 10

3. Profit before tax Profit before tax includes Rent received Audit fees - fees for audit - expenses - services Depreciation Operating lease payments Staff costs Profit on sale of plant C
1 500 272 250 12 10 900 600 1 800 110
4.
Taxation Normal tax Current - current year - underprovision prior year Deferred - current year - rate change
C 1 032.5 1 027.5 5 25 75 (50) 1057.5
Tax rate reconciliation Tax on profits / Standard rate Underprovision prior year Donations Legal fees Traffic fines Dividends received Rate change Per statement of comprehensive income / Effective rate C 1 102.50 5.00 6.00 1.50 3.00 (10.50) (50.00) 1 057.5 % 30.00 0.14 0.17 0.04 0.08 (0.29) (1.37) 28.78
Chapter 9: Page 11
Solution 9.3 continued Workings

Calculation of current tax: Accounting profit Accounting profit on sale of plant Tax gain on sale of plant Donations Legal fees Traffic fines Dividends received (Exempt) Depreciation Wear and tear Prepaid rates - 2003 Prepaid rates - 2004 Royalties in advance - 2003 Royalties in advance - 2004 Taxable income 3 675 (110) 160 20 5 10 (35) 900 (1 165) 25 (40) (30) 10 3 425 X 0,30 1 102.5
1 027.5 Dr TE Cr CTP
Sale of plant Selling price CA / TB Profit Accounting 360 250 110 Tax 360 200 160
Chapter 9: Page 12
Solution 9.4
a) Correcting journal entries Debit Retained earnings Current tax payable Accounts receivable Reversal of fraudulent sales and related commission Alternative entries 1 Retained earnings Current tax payable Accounts receivable Reversal of fraudulent sales Accounts receivable Current tax payable Retained earnings Reversal of fraudulent commission Alternative entries 2 Retained earnings Current tax payable Accounts receivable Reversal of fraudulent sales for 20X3 year Accounts receivable Current tax payable Retained earnings Reversal of fraudulent commission for 20X3 year Retained earnings Current tax payable Accounts receivable Reversal of fraudulent sales for 20X4 year Accounts receivable Current tax payable Retained earnings Reversal of fraudulent commission for 20X4 year 106 500 43 500 150 000
(650 000 X 0.71) (650 000 X 0.29)
Credit
438 425 179 075 617 500
461 500 188 500 650 000
(650 000 X 0.05) (32 500 X 0.29) (32 500 X 0.71)
32 500 9 425 23 075
7 500 2 175 5 325
355 000 145 000 500 000
25 000 7 250 17 750
Amortisation Accumulated amortisation Increased amortisation from change in estimate Deferred tax Tax expense Tax effect of increased amortization
34 483 34 483
10 000 10 000
Chapter 9: Page 13
Chapter 9: Page 14

b) Income statement and statement of changes in equity disclosure
MANGO LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 20X5 20X5 C 7 200 000 (3 600 000) 3 600 000 550 000 (914 483) 3 235 517 (950 550) 2 284 967 2 284 967 3.74 Restated 20X4 C 4 900 000 (2 160 000) 2 740 000 300 000 (735 000) 2 305 000 (671 200) 1 633 800 1 633 800 2.99
Revenue Cost of sales Gross profit Other income Other expenses Profit before tax Income tax expense Profit for the period Other comprehensive income Total comprehensive income EPS
(20X4: 5 400 500)
(20X5: 880 + 34.483) / (20X4: 760 25) (20X5: 960 550 10 000) / (20X4: 808 950 137 750)
(20X5: 2 249 217/600 000) (20X4: 1 613 550/540 000)
MANGO LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 20X5 Ordinary share Share capital premium C C Balance at 01/01/20X4 As previously stated Correction of error Shares issued Total comprehensive income as restated Balance at 01/01/20X5 As previously stated Correction of error Capitalisation issue Profit for period Dividends - Ordinary - Preference Balance at 31/12/20X5 400 000 200 000
Preference share capital C 350 000
Retained earnings C 477 907 579 082 (101 175)
Total C 1 427 907 579 082 (101 175) 200 000 1 633 800 3 261 707 2 550 132 (438 425) 2 284 967 (156 000) (100 000) (56 000) 5 390 674
100 000
100 000 1 633 800 2 111 707 2 550 132 (438 425) 2 284 967 (156 000) (100 000) (56 000)
500 000
300 000
350 000
100 000
(100 000)
600 000
200 000
350 000
4 240 674
Chapter 9: Page 15

MANGO LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 20X5 6. Earnings per share The calculation of earnings per share is based on earnings of C 2 249 217 (20X4:C1 613 550) and on a weighted average of 600 000 (20X4:540 000) shares in issue after a capitalisation issue on 1 April 20X5. Comparatives have been restated. Reconciliation of earnings: 20X5 C Gross Profit for period Preference dividends Basic earnings
(20X5: 20 000+18 000)
20X4 C Net 2 284 967 (38 000) 2 246 967 C Gross C Net 1 633 800 (18 000) 1 615 800
Workings
1. Fictitious sales Decrease in revenue Decrease in expenses (commission) Decrease in profits/retained earnings Tax saving at 29% Net decrease 20X3 (150 000) 7 500 (142 500) 41 325 (101 175) 20X4 (500 000) 25 000 (475 000) 137 750 (337 250) Total (650 000) 32 500 (617 500) 179 075 (438 425)
(5% X 650 000)
Chapter 9: Page 16

2. Change in estimate
Was 01/04/X2 01/04/X2 31/12/X4 CA 750 000 (137 500) TB 750 000 (225 000) TD DT (29%)
31/12/X4 01/01/X5 31/12/X5
Cost Accumulate d depreciation / Tax allowance Balance Depreciation / tax allowance
(750 000 X ^33 / *180) ^(2yrs 9 mths) * (15 yrs) / (750 000 X 0.10 X 3)
612 500
(750 000 X 12 / 180) / (750 000 X 0.10)
525 000 (75 000)
87 500 25 000
25 375 DT
L
(50 000)
7 250 Cr
562 500
450 000
112 500
32 625 DT
L
Is 31/12/X4 01/01/X5 31/12/X5
Balance Depreciation / tax allowance
(612 500 X 12 / *87) *(7yrs 3 mths) or (120 mths 33 mths)
CA 612 500 (84 483)
TB 525 000 (75 000)
TD 87 500 (9 483)
DT (29%) 25 375 2 750
DTL Dr
528 017
450 000
78 017
22 625
DTL
Increase in depreciation Change in temporary differences Decrease in deferred tax liability 3.
(84 483 50 000) (112 500 78 017) (32 625 22 625) or (Was: 7 250 Cr / Is: 2 750 Dr)
34 483 34 483 10 000
Weighted average number of shares Total 400 000 100 000 20X5 400 000 20X4 400 000 50 000 500 000 100 000 100 000 500 000 450 000 90 000 600 000 100 000 600 000 540 000
Opening balance Fresh issue 1 July 04

(20X4:100 000 X 6/12) (20X5: 100 000)
Capitalisation issue
(20X4: 450/5 = 90) (20X5: 500/5 = 100)
Total
Chapter 9: Page 17
Solution 9.5
a) Correcting journals: computer glitch
20X6 Income from sale of widgets (900 000/ 90% x 10%) Income from services rendered Correction of error: service revenue recognised as sales revenue Royalties payable Royalty expense Decrease in royalties payable due to decrease in sales (100 000 x 2%) 100 000 100 000 Debit Credit
2 000 2 000
Tax expense (2 000 x 30%). Current tax payable Increase in tax payable due to decrease in royalty expense
600 600
b)
Interest at 17% 1 July 20X4 30 June 20X5 30 June 20X6 30 June 20X7 112 689 80 846 43 590 237 125 Instalments (300 000) (300 000) (300 000) (900 000) Capital balance 662 876 475 565 256 411 1
Rounding error
c)
Interest at 7% 1 July 20X4 30 June 20X5 30 June 20X6 30 June 20X7 55 111 37 968 19 626 112 705 Instalments (300 000) (300 000) (300 000) (900 000) Capital balance 787 295 542 406 280 374 0
d) (Working 1)
Income type sales interest @ 17% 662 876 56 344 719 220 96 767 815 988 62 218 878 206 21 795 900 001 @ 7% 787 295 27 555 814 850 46 540 861 390 28 797 890 187 9 813 900 000 Difference 124 419 (28 789) 95 630 (50 227) 45 403 (33 421) 11 982 (11982) 0
20X4
( 112 689 x 6/12) (112 689 x 6/12 + 80 846 x 6/12) (80 846 x 6/12 + 43 590 x 6/12) (43 590 x 6/12)
(55 111 x 6/12) (55 111 x 6/12 + 37 968 x 6/12) (37 968 x 6/12 + 19 626 x 6/12) (19 626 x 6/12)
20X5 interest cumulative prior effect 20X6 interest Cumulative effect 20X7 interest
Chapter 9: Page 18
Solution 9.5 continued . . .

Correcting journals: discount rate
1 January 20X6 Debtors See Working 1 Deferred tax (45 403 x 30%) Retained earnings (45 403 13 621) Correction of error: effect on years prior to 20X6 owing to revenue measured using incorrect discount rate (17% instead of 7%) See Working 1 31 December 20X6 Deferred tax See above journal Current tax payable Deferred tax becomes current tax payable when adjustment processed in 20X6 tax return Prior year adjustment to deferred tax recognised as current tax payable: Interest income Debtors Correction of error: effect on current year due to revenue measured using incorrect discount rate (17% instead of 7%) Interest income decreased (62 218 - 28 797) (see working 1) Current tax payable Tax expense Correction of error: effect on current year due to revenue measured using incorrect discount rate (17% instead of 7%) Decrease in tax due to decrease in income (33 421 x 30%) Debit 45 403 13 621 31 782 Credit
13 621 13 621
33 421 33 421
10 026 10 026
Chapter 9: Page 19
Solution 9.5 continued . . .

If it had been possible to process entries in the prior years journals, the journal dated 1 January 20X6 above would have been replaced as follows: Correcting journals: discount rate
31 December 20X4 Interest income (56 344 27 555) Debtors (balancing) Sales income (787 295 662 876) Correction of error: effect of correction of error on revenue and interest income measurement: discount rate 17% instead of 7% Tax expense (95 630 x 30%) Deferred tax Tax effect of the above entry 31 December 20X5 Interest income Debtors Correction of error: effect on 20X5 due to revenue measured using incorrect discount rate: 17% instead of 7% Interest income decreased (96 767 46 540) (see working 1) Deferred tax Tax expense Correction of error: effect on current year due to revenue measured using incorrect discount rate: 17% instead of 7% Decrease in tax due to decrease in income (50 227 x 30%) Debit Credit
28 789 95 630 124 419
28 689 28 689
50 227 50 227
15 068 15 068
Chapter 9: Page 20

e)
CHARTWELL LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 20X6 6. Correction of error Revenue was measured using the incorrect discount rate.
Comments/ calculations Net effect on statement of comprehensive income items Increase/ (decrease) in expenses or losses Per journals - Tax (Increase)/ decrease in income or profits Per journals - Revenue from interest Balancing - Profit for the year
20X5 C
(15 068) 50 227 35 159
Net effect on statement of financial position items Increase/ (decrease) in assets Debtors (Increase)/ decrease in liabilities Deferred tax liability (Increase)/ decrease in equity Retained earnings - closing 7. Revenue Revenue constitutes the following: Sales Services rendered Other income Dividend income Interest income
980 000 + 200 000 100 000 (a) 900 000 + 100 000 (a) Per journals: 95 630 50 227 Per journals: 28 689 15 068 Per journals: 66 941 50 227 + 15 068
20X5 C 45 403 (13 621) (31 782)
20X4 C 95 630 (28 689) (66 941)
20X6 C 1 080 000 1 000 000 2 080 000 400 000 226 579 426 579
20X5 C xxx xxx
260 000 33 421 (d)
xxx xxx
f)
CHARTWELL LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 20X6 20X6 C 2 080 000 (1 500 000) (60 000) (40 000) (102 000) (30 000) 426 579 974 579 (275 574) 699 005 Chapter 9: Page 21
Revenue Cost of sales and services Distribution expenses Administration expenses Other expenses Finance charges Other income Profit before tax Income tax expense Profit for the period
Per note Given 200 000 x 30% 200 000 x 20% 200 000 x 50% + 4 000 2 000 (a) Given Balancing 285 000 + 600 (a) 10 026 (d) Balancing

Other comprehensive income Total comprehensive income
699 005
Chapter 9: Page 22

g)
CHARTWELL LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 20X6 Share capital C Balance: 1 January 20X5 - as previously reported - correction of error (note 6) Total comprehensive income: 20X5 restated Balance: 1 January 20X6 - as previously reported - correction of error (note 6) Total comprehensive income: 20X6 Dividends declared Balance: 31 December 20X6
200 000 (331 800 320 000) (Journals) (320 000-50 227 + 15 068) 200 000 (Given) 78 000
Share premium C
78 000
Retained earnings C
78 741 11 800 66 941
Total C
356 741
284 841 363 582 331 800 31 782 699 005 (50 000) 1 012 587
284 841 641 582
200 000
78 000
699 005 (50 000) 1 290 587
h)
CHARTWELL LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 20X6 20X6 C ASSETS Non-current assets Property, plant and equipment Current assets Trade receivables Cash EQUITY AND LIABILITIES Share capital and reserves Share capital Share premium Retained Earnings Non-current liabilities Deferred tax Current liabilities Trade payables Current tax payable Royalty payable (Given) 864 800 * * 20X5 C 20X4 C
[528 000 + 95 630 (d) 50 227 (d) 33 421 (d)] (Given)
539 982 120 000 1 524 782
3 245 403 * *
2 495 630 * *
200 000 78 000 1 012 587

(Given) (Given) [30 000 + 600 (a) + 13 621 (d) 10 026(d) ] (5 000 2 000)
200 000 78 000 363 582 333 621 * 52 000 * *
200 000 78 000 78 741 328 689 * 40 000 * *
15 000 182 000 34 195 3 000 1 524 782
* Insufficient information to calculate number
Chapter 9: Page 23

Solution 9.1: Solutions To Gripping IFRS: Graded Questions Income Statement Disclosure

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Solution 9.1: Solutions To Gripping IFRS: Graded Questions Income Statement Disclosure

Uploaded by

Copyright:

Available Formats

Solutions to Gripping IFRS : Graded Questions

Income statement disclosure

NDR C 800 000

Retained earnings C 1 424 200 695 800

(400 000 + 20 000) (284 200 200 000)

Kolitz & Sowden-Service, 2009

Solutions to Gripping IFRS : Graded Questions

Income statement disclosure

Kolitz & Sowden-Service, 2009

Solutions to Gripping IFRS : Graded Questions

Income statement disclosure

3 000 000 Qty 5 000 000 1 000 000 6 000 000

110 000 210 000 1 800 000 100 000

284 200 284 200

284 200 284 200 29%

Kolitz & Sowden-Service, 2009

Solutions to Gripping IFRS : Graded Questions

Income statement disclosure

Solution 9.1 continued

Selling price Carrying amount / tax base

W2. Current tax computation

Profit before tax Current tax payable

980 000 278 400

Kolitz & Sowden-Service, 2009

Solutions to Gripping IFRS : Graded Questions

Income statement disclosure

(1 150 000 + 900 000)

(1 327 100 - 50 000)

(5 054 850 + 200 000 - 450 000)

NOTES TO FINANCIAL STATEMENTS 1. Accounting policies

Kolitz & Sowden-Service, 2009

Solutions to Gripping IFRS : Graded Questions

Income statement disclosure

Solution 9.2 continued

4. Income from subsidiaries

Kolitz & Sowden-Service, 2009

Solutions to Gripping IFRS : Graded Questions

Income statement disclosure

Kolitz & Sowden-Service, 2009

Solutions to Gripping IFRS : Graded Questions

Income statement disclosure

Solution 9.2 continued

(2 405 000 + 25 000)

(2 465 000 - 250 000)

5 054 850 300 600

Kolitz & Sowden-Service, 2009

Solutions to Gripping IFRS : Graded Questions

Income statement disclosure

DT 350 (50) 300

40 (10) 950 (200) 200 270 1 250

NOTES TO THE FINANCIAL STATEMENTS AT 31 MARCH 20X4

(10 000 X 12) [(100 000 X 0,12) + 140 000]

(300 000 X 0,05)

Kolitz & Sowden-Service, 2009

Solutions to Gripping IFRS : Graded Questions

Income statement disclosure

Kolitz & Sowden-Service, 2009

Solutions to Gripping IFRS : Graded Questions

Income statement disclosure

Solution 9.3 continued

1 500 272 250 12 10 900 600 1 800 110

C 1 032.5 1 027.5 5 25 75 (50) 1057.5

Kolitz & Sowden-Service, 2009

(612 500 X 12 / 87) (7yrs 3 mths) or (120 mths 33 mths)