In an examination of Daniel Corporation Ltd. as at December 31, 2023, you have learned that the following situations exist. No entries have been made in the accounting records for these items. Daniel Corporation follows IFRS. 

1. The corporation erected its present factory building in 2005. Depreciation was calculated by the straight-line method, using an estimated life of 35 years. Early in 2023, the board of directors conducted a careful survey and estimated that the factory building had a remaining useful life of 25 years as of January 1, 2023.

2. An additional assessment of 2022 income tax was levied and paid in 2023.

3. When calculating the accrual for officers’ salaries at December 31, 2023, it was discovered that the accrual for officers’ salaries for December 31, 2022, had been overstated.

4. On December 15, 2023, Daniel Corporation declared a stock dividend of 1,000 common shares per 100,000 of its common shares outstanding, distributable February 1, 2024, to the common shareholders of record on December 31, 2023.

5. Daniel Corporation, which operates on a calendar-year basis, changed its inventory method as of January 1, 2023. The inventory for December 31, 2022, was costed by the average method, and the inventory for December 31, 2023, was costed by the FIFO method. Daniel Corporation is changing its inventory method because it would result in reliable and more relevant information.

6. Daniel Corporation has guaranteed the payment of interest on the 20-year first mortgage bonds of Bonbee Inc., an affiliate. Outstanding bonds of Bonbee amount to $150,000 with interest payable at 6% per annum, due June 1 and December 1 of each year. The bonds were issued by Bonbee on December 1, 2016, and the company has met all interest payments except for the payment due December 1, 2023. Daniel states that it will pay the defaulted interest to the bondholders on January 15, 2024.

7. During 2023, Daniel Corporation was named as a defendant in a lawsuit for damages by Anand Shahid Corporation for breach of contract. The case was decided in favour of Anand Shahid, which was awarded $80,000 damages. At the time of the audit, the case was under appeal to a higher court.

Instructions

a. Describe fully how each item should be reported in the financial statements of Daniel Corporation for the year 2023.

b. Determine if any of the treatment given under IFRS in part (a) would be different if ASPE had been used.