Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

21. The following is the Trial Balance of Sonia HR Enterprises, a dealer in HR Software, as at 31 st December, 2021. Additional information available

image text in transcribed
image text in transcribed
21. The following is the Trial Balance of Sonia HR Enterprises, a dealer in HR Software, as at 31 st December, 2021. Additional information available is given below: i. The inventory sheets as at 31/12/2021 put the value of inventory at GHS129,500. ii. Allowance for doubtful debt is to be increased to GHS19,080 as at 31 December 2021. iii. An amount of GHS6,000 in respect of rent and rates is included in administrative expenses. This amount relates to 2022 financial year. iv. All items of property, plant and equipment are depreciated at the rate of 10% per annum on the straight line basis. v. An amount of GHS10,000 incurred in the repair of plant had been debited to the plant account. vi. Personal withdrawal of cash amounting to GHS25,000 was made by Miss Sonia, the proprietress. This has not been recorded in the financial records. Required: Prepare in a suitable form for publication, a. Income statement for the year ended 31 st December, 2021. 10 marks b. Statement of financial Position as at 31 st December, 2021. to marks 4 All statements are to be prepared in accordance with the requirements of intemational Financial Reporting Standards. Ignore taxation. 22. ABC Ltd has inventory on hand at the end of the reporting period as follows: At what amount will inventories be stated in the statement of financial position in accordance with IAS 2 ? 23. The following are the cost, estimated sales value, and the cost to complete for the items of inventory held by XYZ LTD at December 31, 2015. t Find the value of inventories to be included in the financial statements. 24. ICAG Limited procured 1,000 units of its Financial Reporting study manual for GHC100,000 and incurred freight charges of GH10,000. During the year, the company sold 750 units at GHC150 per unit. At the end of the year, ICAG Limited had 250 units of inventories, out of which 50 units were damaged. It is estimated that the damaged units can be sold at GHC25 per unit and the remaining 200 units, at GHC150 per unit. What will be the value of inventory at the end of year and the impact of the sale of damaged units on the income statement for the current financial reporting period? 25. Kyeiwaa Limited has been valuing its closing inventories under the weighted average cost method. At the beginning of 2016 management decided to change its accounting policy relating to the valuations of inventories to the FIFO method since it is considered to more accurately reflect the usage and flow of inventories in the economic cycle. Is the change in the accounting policy justified? 21. The following is the Trial Balance of Sonia HR Enterprises, a dealer in HR Software, as at 31 st December, 2021. Additional information available is given below: i. The inventory sheets as at 31/12/2021 put the value of inventory at GHS129,500. ii. Allowance for doubtful debt is to be increased to GHS19,080 as at 31 December 2021. iii. An amount of GHS6,000 in respect of rent and rates is included in administrative expenses. This amount relates to 2022 financial year. iv. All items of property, plant and equipment are depreciated at the rate of 10% per annum on the straight line basis. v. An amount of GHS10,000 incurred in the repair of plant had been debited to the plant account. vi. Personal withdrawal of cash amounting to GHS25,000 was made by Miss Sonia, the proprietress. This has not been recorded in the financial records. Required: Prepare in a suitable form for publication, a. Income statement for the year ended 31 st December, 2021. 10 marks b. Statement of financial Position as at 31 st December, 2021. to marks 4 All statements are to be prepared in accordance with the requirements of intemational Financial Reporting Standards. Ignore taxation. 22. ABC Ltd has inventory on hand at the end of the reporting period as follows: At what amount will inventories be stated in the statement of financial position in accordance with IAS 2 ? 23. The following are the cost, estimated sales value, and the cost to complete for the items of inventory held by XYZ LTD at December 31, 2015. t Find the value of inventories to be included in the financial statements. 24. ICAG Limited procured 1,000 units of its Financial Reporting study manual for GHC100,000 and incurred freight charges of GH10,000. During the year, the company sold 750 units at GHC150 per unit. At the end of the year, ICAG Limited had 250 units of inventories, out of which 50 units were damaged. It is estimated that the damaged units can be sold at GHC25 per unit and the remaining 200 units, at GHC150 per unit. What will be the value of inventory at the end of year and the impact of the sale of damaged units on the income statement for the current financial reporting period? 25. Kyeiwaa Limited has been valuing its closing inventories under the weighted average cost method. At the beginning of 2016 management decided to change its accounting policy relating to the valuations of inventories to the FIFO method since it is considered to more accurately reflect the usage and flow of inventories in the economic cycle. Is the change in the accounting policy justified

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Sustainable Development Goals Key Principles And Tools For Supply Chain

Authors: Barden Gonzalez

1st Edition

B0BZFDM86C, 979-8388651501

More Books

Students also viewed these Accounting questions

Question

What are two major trade-offs in capacity planning?

Answered: 1 week ago

Question

Are there any questions that you want to ask?

Answered: 1 week ago