IAS02 INVENTORY

Ques 2-FIFO

Sale on credit -> Bán chưa thu tiền

Sale on cash -> Bán thu tiền

Purchase on credit -> Mua chưa trả tiền

Parchase on cash -> Mua trả tiền

Method 1:

Febuary:

1.50 units in stock at a cost of $40 per unit

7.100 units purchase on credit ~ 45$ per unit

Journal entry:

Debit Inventory $4500

Credit Trade Payable $4500

50_$40

100_$45

14.80 units sold on credit at a price of $60 per unit

Journal entry:

Debit Trade Receiable $4800

Credit Revenue $4800

Cost of sale:Inventory sold 50 units-40$,30 units -$45

Debit Cost of sale $3350

Credit Inventory $3350

70_$45

21.50 units purchased on credit at a cost of $50 per unit

Journal entry:

Debit Inventory $2500

Credit Trade Payable $2500

70_$45

50_$50

28.60 units sold on credit at a price of $65 units

Journal entry:
Debit Trade Receiable $3900

Credit Revenue $3900

Cost of sale:Inventory sold:60 units- $45

Debit Cost of sale $2700

Credit Inventory $2700

10_$45

50_$50

 Closing inventory = 10*$45+50*$50=$2950

Statement of profit or loss (SOPL)

Revenue $4800+$3900=$8700

Cost of sale $3350+$2700=$6050

Statement of financial position(SOFP)

Asset

Current asset-Inventory $2950

Ques 3-AVCO

March

1.50 units held in opening inventory at a cost of $40 per units

50_$40

17.50 units purchased at a cost of $50 per units

Journal entry:

Debit Inventory $2500

Credit Trade Payable $2500

50_$40

50_$50

Average cost: (50*$40+50*$50)/100=$4

31.60 units sold at a selling price of $100 per unit

Journal entry:

Debit Trade Receiable $6000

Credit Revenue $6000

Cost of sale:

Debit Cost of sale $2700

Debit Inventory $2700

Closing inventory:$2000

Statement of profit or loss (SOPL)

Revenue $6000

Cost of sale $2700

Statement of financial position(SOFP)

Asset

Current asset-Inventory $2000

Ques 4-AVCO

1.Opening inventory=0

2.Closing inventory=8*$257=$2056

Average cost per units:(10*$300+12*$250+6*200)/28~257

Date of transaction:

1.2.20X1 : Opening inventory: nil

1.3.20X1 : Buys 10 units at $300 per unit

Journal entry:

Debit Inventory $3000

Credit Trade payable $3000

10_$300

11.3.20X1 : Buys 12 units at $250 per unit

Journal entry:

Debit Inventory $3000

Credit Trade Payable $3000

10_$300

12_$250

1.4.20X1: Sells 8 untis at $400 per unit

Journal entry:

Debit Trade receivable $3200

Credit Revenuu $3200

Cost of sale:

Debit Cost of sale $2056

Credit Inventory $2056

2_$300

12_$250

1.8.20X1 : Buys 6 units at $200 per unit

Journal entry:

Debit Inventory $1200

Credit Trade payable $1200

2_$300

12_$250

6_$200

1.12.20X1 : Sells 12 units at $400 per unit

Journal entry :

Debit Trade receivable $4800

Credit Revenue $4800

Cost of sale :

Debit Cost of sale : $3084

Credit Inventory : $3084

2_$250

6_$200

Closing inventory:8*$257 =$2056

Statement of profit or loss

Revenue $8000

COS $5140

Statement of financial position

Asset

Current asset:$2056

Ques 6:Counting after reporting date

Inventory at the reporting date (31.10.20X3) : $X

Adjustment transaction between reporting date & counting date:

(1) Add:Goods from supplier: $38,400

(2) Less:Sale inventory: $14,800
(3) Add:Returned goods from customer: $400
 (4) Less:Returned goods to supplier $1800

Inventory at counting date (4.11.20X3):$500,000

X=$500000+$1800-$400+$14800-$384000=$477800

If entry recorded closing inventory based on value of inventory at counting date

 Adjustment entry:

Debit Cost of sale $22000

Credit inventory $22000

Ques 15: Compare NRV and cost => LOWER

Model A:

Cost incurred :

1. Purchase cost $4800

2. Repaired cost $750

Cost not incurred :

3. Tranportation cost :$400

4. Expected sale price :$7500

Model B:

Cost incurred:

1. Purchase cost $6800

2. Repaired cost $1800

Cost not incurred

3. Estimated repair cost $1100

4. Expected sell $8000

Model C

Cost incurred:

1. Purchase cost $8500

Cost not incurred

2. Estimated repairs $1200

3. Expected sell $11500

IAS 16 PPE
Ques 2:

At date of purchase asset,journal entry:

Debit Asset $76000

Credit Cash or Trade payable $76000

 Depreciation of the asset for the year ended: 31.12.20X6=($76000-$16000)/10=$6000

Journal entry:

Debit Depreciation expense: $6000

Credit Accumulated depreciation $6000

Carrying amount of asset at year ended 31.12.20X6 = $76000-$6000*15/12==$68500

Statement profit or loss

Depreciation expence: $6000

Statement of financial position

Non current asset : PPE $68500

Ques 3:

Purchase the asset,journal entry:

Debit Asset $30000

Credit Trade payable $30000

Depreciation of the asset for the year ended 30.9.20X0 = ($30000-$6000)/4 =$6000

Journal entry:

Debit Depreciation expense $6000

Credit Accumulated depreciation $6000

Carrying amount of asset at the year ended 30/9/20X0 = $30000-$6000*5/12=$27500

Statement profit or loss:

Depreciation expense : $6000

Statement financial position

Non current asset: PPE $27500

Ques 4:

Purchase the asset, journal entry:

Debit Asset $15000

Credit Trade payable $15000

The reducing balance method at 15% per unnum => The reducing balance method at 1,25% per
month

Depreciation of the asset for the year ended 30.11.20X1 = $15000*1,25*2/100=$375

Journal entry:

Debit Depreciation expense $375

 Credit Accumulated depreciation$375

Carrying amount of the asset at the year ended:$15000-$375 =$14625

Statement of loss or profit

Depreciation expense:$375

Statement of financial position

Non current asset:PPE:$14625

Ques 5:

Depreciation expense for the year ended 31.12.20X1

$250000*40% = $100000

Journal entry depreciation expense for 20X1

Debit Depreciation expense $100000

Credit Accmulated depreciation $100000

Carrying amount of asset at 31.12.20X1

$250000-$100000=$150000

Depreciation Expense for the year ended 31.10.20x2

$150000/4years =$37500

 Carrying amount remained $150000

 Useful life remained 4years
 Resividual Value 0

Journal entry

Statement of profit or loss

Depreciation expense : $137500 ($100000+$37500)

Statement of financial position

Non current asset PPE : $112,500

Ques 13:

Carrying amount of asset: $65,000

Cash received: $50,000

 Loss on disposal of PPE:$15,000 (Other income)

Journal entry for disposal of PPE

Debit Cash $50,000

Debit Loss on disposal $15,000

Credit Asset $65,000

Cost $100,000 Debit Accumulated Depreciation $65,000

Accumulated Depreciation $35,000 ->>>

Credit Asset at cost $100,000

Ques 14:

Depreciation of the asset from 31.12.20X2 to 30.6.20X3

$15,000/5*6/12=$1500

Journal entry:

Debit Depreciation expense $1,500

Credit Accumulated Depreciation $1,500

Carrying amount of asset at 30.6.20X3:$15,000-$1,500-$10,000 =$3500

Trade in value of asset given was $5,500

Profit or loss on disposal of asset:

-Reduce exchange asset => carrying amount $3,500

-Received new asset => cost $20,500

-Profit on disposal of exchange asset => $5,500-$3,500=$2000

Additional paid by cash:$20,500-$5,500= $15,000

Journal entry:

Debit PPE $20,500

Credit PPE $3,500

Credit Profit on disposal $2000

Credit Cash $15,000

Deprecitaion of new asset from 30.6.20X3 to 31.12.20X3 = $20,500 /8*6/12 =$1,281

Journal entry:

Debit Depreciation Expense $1,281

Credit PPE $1,281

Carrying amount of new asset at 31.10.20X3 = $20,500 - $1,281 = $19219

Statement of profit or loss

Depreciation expense : $2781 ( Old asset + new asset )

Other income: Profit on disposal asset $2000

Statement of financial position

PPE $19219
Ques 9:

Purchase date 1.1.20X3 Annual depreciation = $1000,000/50=$20,000

Cost:$1,000,000 Carrying amount at 31.12.20X3: $1000,000-$20,000=$980,000

Journal entry:

Debit Depreciation Expense $20,000

Credit Accumulated Depreciation $20,000

At 31.12.20X3 revaluation of PPE to fair value $1,200,000

At 31.12.20X3 carrying amount $980,000 => Fair value $1,200,000

 Increased $220,000

Debit PPE $220,000

Credit Revaluation Surplus $220,000

At 30.6.20X4 the asset was sold for $1,195,000

……

Ques 10:

Purchase property on 1.1.20X0: $170,000

Depreciation expense of property for the year ended 31.12.20X0=$170,000/20=$8,5000

Journal entry:

Debit Depreciation Expense $8,500

Credit PPE $8,500

Carrying amount of property:$170,000-$8,500=$161,500

At 31.12.20X0 property has been revalued at $210,000

 Increased $48,500

Journal entry:

Debit PPE $48,500

Credit Revaluation Surplus $48,500

PREPARE EXTRACTED FINANCIAL STATEMENT

Statement of profit or loss

Depreciation expense $8,500

Other comprehensive income:

Revaluation surplus $48,500

Statement of financial position

 Non current asset PPE:$210,000

Equity

Revaluation surplus $48,500

Ques 11:

Purchased date 1.1.20X1 for $750,000

Useful life:25 years

Depreciation expense for building: $750,000/25 = $30,000

Journal entry:

Debit Depreciation expense $30,000

Credit Accumulated Depreciation $30,000

Carrying amount of building at 31.12.20X2 : $750,000-$30,000=$720,000

At 31.12.20X2 valued the building at $1,000,000

The building revaluate to $1,000,000 there is a revaluation surplus = $1,000,000-$720,000 =$280,000

Journal entry:

Debit PPE $280,000

Credit Revaluation surplus $280,000

(**)31.12.20X3 Ended

Carrying amount of asset: $1,000,000 with useful life 24 years and balance of revaluation surplus is
$280,000

Depreciation of building for the year ended 31.12.20X3

$1,000,000/24=$41667

Journal entry:

Debit Depreciation Expense $41667

Credit Accumulated Depreciation $41667

Carrying amount of building; $1,000,000 - $41667 = $958333

Tranfer revaluation surplus to retained earnings

$280,000/24years = $11667

Journal entry:

Debit Revaluation Surplus $11667

Credit Retained Earnings $11667

Statement of profit or loss:

 Depreciation Expense $41667

Other comprehensive income:

Revaluation surplus $0

Statement of financial position

Non current asset

PPE $198,947

IAS 38 INTANGIBLE ASSET

Ques 6 ( Theory)

Such as intellectual property, brand recognition, customer relationships, patents, copyrights,

trademarks, and goodwill.

A patent ( bằng sáng chế)

(1) Bring FUTURE ECONOMIC BENEFIT

 Yes => why
 With the patent,the entity could produce vaccine and obtain benefit form sale of vaccine
(2) Entity CONTROL the asset
 Yes => why
 The entity has legal right and could not produce the vaccine without patent
(3) Cost measured reliably
 Yes => Why
 The entity has legal title for the patent

CONCLUSION => recognized as intangible asset

Title ‘Healthy life’

(1) Bring FUTURE ECONOMIC BENEFIT

 Yes
 Increase number of reader => increase revenue of the entity
(2) Entity CONTROL the asset
 No
 Could not restrict other create a similar title

(3)Cost measured reliably

=>No

=> could not measured reliably

(4)Identifiable(Nhận dạng)

=>No

=>Not separate with entity

(Dn không tồn tại => đề mục này cũng không tồn tại)
 IAS 40:INVESTMENT PROPERTY
Ques 4:

(a)Propety A

(1)Before convert into investment property,the building is accounted in accordance IAS16

(2)At 1.4.20X2 purchase building with journal entry

Debit PPE $2 milion

Credit Payable $2 milion

(3) Depreciation of the building from 1.4.20X2 to 1.10.20X2 = $2000000/20*6/12=$500000

Debit P&L $500000

Credit PPE $5000000

(4) Carrying amount of PPE at 1.10.20X2

$2m-$0,5m=$1,95m

(5) At date the asset is converted to investment property ,it measured at fair value,change in fair
value should be record at revaluation surplus
(6) Revaluation surplus recognized: $2,3 -$1,95 =$0,35
(7) Journal entry:

Debit investment property $2,3

Credit PPE $1,95

Credit Revaluation surplus $0,35

(8) After tranfer to investment property,the asset does not depreciate and measured at fair
value at year end with difference recognized in P&L
(9) Change in fair value of investment property at year end
$2,34m-$2,3m=$0,04m
(10)Journal entry:

Debit investment property $0,04m

Credit Change in fair value of investment property $0,,04m

PREPARE EXTRACTED FINANCIAL STATEMENT

Statement of profit or loss

Depreciation expense $0,05m

Change in fair value ( P&L) $0,04m

Other comprehensive income

Revaluation surplus $0,35m

Statement of financial position

 Asset

Investment property $2,34m

Equity

Revaluation surplus $0,35m

Property B

(1) Cornmercial rent -> Investment property

(2) Fair value $1,5 milion at 1.4.2012
(3) Fair value had risen to $1,65 milion at 31.3.2013

Change in fair value of investment property at the year end = $1,65-$1,5 = $0,15

Journal entry:

Debit investment property $0,15

Credit change in fair value of investment property $0,15

PREPARE EXTRACTED FINANCIAL STATEMENT

Statement of profit or loss

Change in fair value of investment property $0,15

Statement of financial position

Asset

Investment property $1,65 milion

IAS 36: IMPAIRMENT OF ASSET

Impairment of asset : ( Giảm giá)

- IAS 16 : PPE
- IAS 38 : Intangible asset
- IAS 40 : Investment property

(1) What is impairment

(2) How to account impairment loss

(3) When essess impairment

Impaired:

-Option 1: Continue use

=> Value in use ( present in value of future cash flow from asset

-Option 2: Sale the asset

=> Fair value – Cost to sell

Recoverable amount => Higher ->Value in use

->Fair value – cost to sell

Ques 1:

Carrying amount : $850,000

Higher => Value in use $760,000

=>Fair value – Cost to sell = $850,00-$30,000=$820,000

->Recoverable amount $820,000

 Impairment loss : $30,000

Journal entry:

Debit Expense $30,000

Credit PPE $30,000

Ques 2:

Carrying amount $85,000

Fair value – Cost to sell= $78,000-$2,500=$75,500

Now 1 2 3

=$30,000/1,08%+$30,000/(1,08)^2+$30,000/(1,08)^3

Value in use=$71,445

 Recoverable amount:$75,500

Impairment loss:$85,000-$75,500=$9,500

Journal entry:

Debit Expense $9,500

Credit PPE $9,500

Ques3:

(i) Carrying amount:$3 milion

(ii) Fair value:$2,7 milion
(iii) Value in use:$2,6 milion
(iv) Cost to sell:$50,000

Higher => Fair value – Cost to sell = $2,7 million -$50,000=$2,65 milion

=>Value in use $2,6 milion

=> Recoverable amount= $2,65 milion

Impairment loss : $3 milion - $2,65 milion = $0,35 milion

Journal entry:
 Debit Expense $0,35 milion

Credit PPE $0,35 milion

Ques 4:

Amortisation of the brand from 1.10.20X8 to 1.4.20X9

$30 milion/10*6/12==$1,5 milion

Journal entry:

Debit Amortisation expense $1,5 milion

Credit Intangible asset $1,5 milion

Carrying amount of intangible asset:

$30 milion - $1,5 milion - $9 milion =$19,5milion

At 1.4.20X9 the entity used determine recorverable amount which is the higher between value in use
and fair value less cost to sell

Fair value – Cost to sell = $15 million

Value in use $12 milion

 Recoverable amount $15 milion

Carrying amount of asset higher than recoverable amount so impaired

Impairment loss =$19,5 milion - $15 milion = $4,5 milion

Journal entry:

Debit Expense $4,5 milion

Credit Intangible asset $4,5 milion

Amortization of intangible asset from 1.4.20X9 to 30.9.20X9

$15m/3year *6/12 = $2.5 milion

Journal entry :

Debit Amortization expense $2,5m

Credit intangible asset $2,5m

Carrying amount of intangible asset $15m - $2,5m = $12,5 m

Statement of profit or loss

Expense $7,5 m

Statement of financial position

Intangible asset $12,5m