Hi there, I need help with these questions,

QUESTION 1:

Provide some examples of items that would be adjusted directly against equity, rather than being included as part of profit or loss.

QUESTION 2:

You are to consider the following two scenarios:

Scenario 1 Fishtail Ltd has changed its basis of calculating doubtful debts from 2.5 per cent of gross accounts receivable to 4.0 per cent of gross accounts receivable.

Scenario 2 Fishtail Ltd has previously allocated costs to inventory using a weighted-average costing approach. It was decided to change to a first-in, first-out inventory cost-flow assumption.

REQUIRED

Identify, giving reasons, which of the above scenarios is a change in accounting policy and which is not a change in accounting policy. Further, you are required to describe how the above scenarios are to be accounted for.

QUESTION 3:

On 30 June 2023, the end of the current reporting period, Lynch Ltd made a decision, using the information obtained over the past few years, to revise the useful life of a particular item of its buildings acquired ten years earlier for $2 000 000. The useful life was revised from being a total of 25 years to being a total of 15 years. The building was originally depreciated on the straight-line basis over its useful life and it was expected that the asset would have no residual value. No depreciation has been provided in the current period.

REQUIRED

(a) Prepare the journal entry to account for the change in accounting estimate.

(b) Assuming that the change in accounting estimate had a material effect on financial performance for the period, write an appropriate supporting note.

QUESTION 4:

What is non-IFRS financial information? Discuss how ASIC's RG230 could be applied to minimise the provision of non-IFRS financial information that could be misleading to investors.

QUESTION 5

During 2020, Point Addis Ltd commenced the construction of a windfarm for its own use. During the reporting period ending 30 June 2023, a change in accounting standards means that the directors are required to change the company's treatment of borrowing costs incurred in the construction of assets for its own use. In previous periods Point Addis Ltd expensed such costs, but must now capitalise them as part of the construction cost in line with the requirement of AASB 123. The unadjusted statement of profit or loss and other comprehensive income and statement of changes in equity for the reporting period ended 30 June 2023 are detailed below.

__________________________________________________________________________

Point Addis Ltd

Abridged statement of profit or loss and other comprehensive income for the20232022

Year ended 30 June 2023($) ($)

Profit before tax

14 600

14 200

Income tax expense

(4 380)

(4 260)

Profit for the year

10 220

9 940

Other comprehensive income

-

-

Total comprehensive income

10 220

9 940

Point Addis Ltd

Abridged statement of changes in equity for the year ended

Share capital

Retained earnings

Total

30 June 2023

($)

($)

($)

Balance at 1 July 2021

12 500

8 050

20 550

Profit for the year ended 30 June 2022

9 940

9 940

Distributions to shareholders

-

(2 700)

(2 700)

Balance at 30 June 2022

12 500

15 290

27 790

Profit for the year ended 30 June 2023

-

10 220

10 220

Distributions to shareholders

-

(3 700)

(3 700)

Balance at 30 June 2023

12 500

21 810

34 310

Point Addis Ltd

Statement of financial position (extract) at 30 June 2023

2023

($)

2022

($)

2021

($)

Qualifying asset under construction

10 700

6 650

4 400

Other assets

23 610

21 140

16 150

34 310

27 790

20 550

Share capital

12 500

12 500

12 500

Retained earnings

21 810

15 290

8 050

34 310

27 790

20 550

ADDITIONAL INFORMATION

1.In 2023, interest of $4000 relating to the construction of the windfarm was expensed. Interest costs of $3000 were expensed in 2022, $3900 was expensed in 2021 and $2200 was expensed in reporting periods prior to 2021.

2.No depreciation has been charged on the windfarm as it has not yet been commissioned.

3.The tax rate has remained at 30 per cent for the past three years.

REQUIRED:

Redraft the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of financial position (extract) so as to comply with generally accepted accounting practice and all relevant accounting standards.