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Task 1The following is an extract from the trial balance of Ice Co, an entity, as at 31 March 20X9:
Inventory valuation at 1 April 20X8
Purchases and other expenses
Note: Inventory valuation at 31 March 20X9 was $50,000.
Task 2You are now advised that, on 1 July 20X8, ACE Co raised loan finance of $200,000 which will be repayable in a single instalment on 30 June 20Y2. Interest is payable annually at the rate of 8% in arrears.A. What expense should be included in Ice Co’s statement of profit or loss in relation to the loan finance?
On 21 April 20X9, Ice Co received notification from a customer that they had suffered injury as a result of using one of its products which had been purchased in March 20X9.The customer made a claim for compensation amounting to $6,800 and Ace Co’s legal advisors have advised that it is virtually certain that compensation will be required to settle the claim.
How should this matter be reflected in Ice Co’s financial statements for the year ended 31 March 20X9?
ACE Co is considering whether to undertake some work in relation to the freehold land and buildings that it owns.A. State whether each of the following costs should be capitalised or treated as revenue expenditure.(i). Modifications to the factory entrance to enable a large item of plant and equipment to be installed
Freehold land and building–cost (Land $100,000)
Freehold building– accumulated dep’n at 1 April20X8
Plant and equipment – cost
Plant and equipment–accumulated dep’n at 1 April 20X8
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