Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

About what that's the whole question. I think you have to read it again. Please answer ASAP. Apollo Limited commenced trading on 1st January 2020,

About what that's the whole question. I think you have to read it again. Please answer ASAP.

image text in transcribed

image text in transcribed

Apollo Limited commenced trading on 1st January 2020, issuing 471,000 1 ordinary shares at par. On the same day, the funds raised were used to purchase freehold land and buildings of 175,000, plant and machinery of 200,000 and 4,800 units of inventory for 20 each. Notes 1 During the year ended 31st December 2020, Apollo Limited sold three-quarters of the inventories for cash of 40 each. These sales occurred evenly throughout the year, with the selling price remaining unchanged and no other purchases were made during the year. 2 Operating expenses (except for cost of sales and depreciation) amounted to 44,000. 3 The freehold land and buildings are maintained to a high standard such that they will endure; accordingly, zero depreciation is recognised in Apollo Limited's financial statements. 4 At 31st December 2020, equivalent premises would have cost Apollo Limited 184,730 to buy. At that date it could have sold the premises for 204,000. 5 The plant and machinery have an anticipated useful economic life of ten years, with zero residual value expected. 6 At 31st December 2020, replacing the plant and machinery with new (ie. unused) equivalents would have cost Apollo Limited 205,000. At that date it could have sold the plant and machinery for 184,000. 7 The replacement cost of a unit of inventory varied during the year as follows: Replacement cost per unit 31st January 30th June 25 31st December 30 20 12 of 19 8 At 31st December 2020, Apollo Limited's Chief Financial Officer calculated the Net Present Value of its land and buildings to be 190,000, and that of its plant and machinery to be 210,000. 9 At 1st January 2020 the Consumer Prices Index measured 108.3. Assume that at 31st December it measured 111.0. Required (a) Prepare a Statement of Financial Position for Apollo Limited as at 31st December 2020, and an Income Statement for the year then ended, using: (0) Historic cost accounting, and Current Cost Accounting*; and COCOA (Continuously Contemporary Accounting) We recommend that you set up your answer using parallel columns for the different valuation bases, so that you only need to write the captions for the Statement of Financial Position and the Income Statement once. In your Income Statement for Current Cost Accounting, you should split holding gains for the assets between realised and unrealised gains. (16 marks) (b) Discuss how the information provided might be useful to potential providers of finance

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

Survey Of Accounting

Authors: Carl S. Warren

1st Edition

0538870850, 9780538870856

More Books

Students also viewed these Accounting questions

Question

Focus on the interview.

Answered: 1 week ago