Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please solve the question provided in above picture. Q-02 (MARKS: 15) After reviewing the financial statements section of Annual report dated Dec 31, 201 the

image text in transcribed

please solve the question provided in above picture.

Q-02 (MARKS: 15) After reviewing the financial statements section of Annual report dated Dec 31, 201 the following points regarding Statement of financial Position against which doubts are presented to you. Inventory: The following items are included in Inventory a. Goods held on consignment from another company b. Short term investments in shares and bonds that will be resold in near future Goods sold f.o.b destination that are in transit at Dec-31 d. Office supplies e. Goods sent on consignment to another company c. = Investments: a. Bonds that will mature in 5 years are purchased; the company has a strategy to hold them to collect the contractual cash flow on bonds for 5 years. (These bonds are reported at fair value). b. Ordinary shares of a distributor are purchased to meet regulatory requirement for doing business in the distributor's region, the investment will be held indefinitely (Classified as trading). Property Plant and Equipment a. Interest cost during the construction of a building is not included in the cost of the building. b. There is a recovery of impairment loss regarding equipment resulting in an amount in excess of the carrying value that would result had impairment would not occurred. c. Gain on Revaluation of Land is disclosed in Income statement Receivables The company has treated a tax refund as receivable the outcome of which is probable Liabilities Including in liabilities is a contingency regarding a litigation the outcome of which is possible but not probable. Required: You being Financial Analyst asked to Comment on each Note stated above, also give your suggestions for a right treatment if there is a wrong treatment

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

Quality Audits For Improved Performance

Authors: Dennis R. Arter

2nd Edition

0873892631, 978-0873892636

More Books

Students also viewed these Accounting questions

Question

=+ (b) Find an example where u is not countably subadditive.

Answered: 1 week ago

Question

What is the cerebrum?

Answered: 1 week ago

Question

=+7. What is the big message you want them to know? (THINK SLOGAN.)

Answered: 1 week ago