Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please explain the key factors to define whether an entity is a reporting entity under SAC1 'Definition of the Reporting Entity'. In the following cases,

Please explain the key factors to define whether an entity is a reporting entity under SAC1 'Definition of the Reporting Entity'. In the following cases, are the entities reporting entities? Give reasons for your answers.

ME Pty Ltd is a proprietary company. It has two shareholders, each of whom is involved in the day-today management of the company. ME has few other employees, no debt and assets of $850 000. It also has about 25 trade creditors, none of whom is owed more than $10 000. In buying goods and services, the company has a pool of about 120 suppliers from whom it can purchase. b) Lion Ltd is a public company with five shareholders, each of whom is a director involved in the day-today operations of the company. The company has a debt-to-equity ratio of 5 to 1. All debt is owed to a syndicate of bankers under a four-year revolving credit agreement. The company has one main supplier and employs seven people who have been employees for many years. Its major asset is an office building. c) JWS Pty Ltd is a proprietary company. It has approximately 90 employees and three shareholders /directors managing the company. It has a bank overdraft facility of $90 000.

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

Cost management a strategic approach

Authors: Edward J. Blocher, David E. Stout, Gary Cokins

5th edition

73526940, 978-0073526942

More Books

Students also viewed these Accounting questions

Question

11. How is a permanent dechne in the value of investments recorded?

Answered: 1 week ago

Question

4. What is the goal of the others in the network?

Answered: 1 week ago

Question

2. What we can learn from the past

Answered: 1 week ago