Question
Could you please assist me in answering these questions? Thank You Very Much! Question 1 ACCFIX is an accounting firm is in Canada and provides
Could you please assist me in answering these questions? Thank You Very Much!
Question 1
ACCFIX is an accounting firm is in Canada and provides accounting service to MTN
company. ACCFIX company wants to acquire real estate and needs some advices. If you
are stuff of ACCFIX accounting firm, please clearly give advices to MTN company with
these following issues related to IAS 16 - Property, Plant and Equipment.
1) Explain the definition of real estate and provide examples of real estate.
2) Explain the initial recognition of real estate and define costs which should be
included in the cost of real estate.
3) Explain the subsequent recognition of real estate if MTN company uses Cost
model. How should MTN report this account in the statement of financial
position?
4) Explain the most suitable calculation method of depreciation if MTN needs the
highest net income in statement of profit or loss.
Question 2
TOOLS4U company acquired building in the last year. This building has 3 floors
and TOOLS4U will use the 2nd and 3rd floor to be his office. The 1st floor will be rent to
SMG. Then, SMG renovated and built additional parts to operate new
restaurant.
According to the above-mentioned story, please clearly explain these following
questions:
1) In accordance with related IFRS standards, how does TOOLS4U company
recognize this building?
2) Explain how different between the recognition of 1st floor under IAS 16 and the
recognition of 1st floor under IAS 40 when using Revaluation model in these two
situations:
a. An increase of fair value at the end of fiscal year
b. A decrease of fair value at the end of fiscal year
Question 3
SWANGRTI Corporation
Statement of financial position
For year ended on December 31, 2021.
Cash and cash equivalents 10,000
Loan receivables 10,000
Prepaid expenses 10,000
Accounts receivables 10,000
Other receivables 10,000
Plant and Equipment 15,000
Less: Accumulated depreciation (5,000) 10,000
Property 20,000
Total Assets 80,000
Accounts payable 10,000
Loan payable 10,000
Other payable 10,000
Bonds payable 10,000
Common stock 30,000
Retained earnings 10,000
Total Liabilities and Equities 80,000
Required:
1) Is the above statement of financial position prepared following eight general
principles provided by IAS 1 - Presentation of financial statement?
2) According to 1), please show me the correct form of statement of financial
position if we prepare following IAS 1 - Presentation of financial statement.
3) To be the most useful to users of financial statements, what characteristics of
financial information should be included in?
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