Chapter 9 - Solutions to Gripping IFRS : Graded Questions...

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Solutions to Gripping IFRS : Graded Questions Income statement disclosure Kolitz & Sowden-Service, 2009 Chapter 9: Page 1 Solution 9.1 (a) ST KITTS LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY20X7 Notes 20X7 C Revenue 12 000 000 Cost of sales (7 100 000 + 80 000) (7 180 000) Operating expenses (3 480 000 + 120 000) (3 600 000) Finance costs (240 000) Profit before tax 4 980 000 Income tax expense (W2) 5 (284 200) Profit for the period 695 800 Other comprehensive income Revaluation surplus 800 000 Total comprehensive income 1 495 800 (b) ST KITTS LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 28 FEBRUARY 20X7 Ordinary share capital Share premium NDR Retained earnings Total C C C C C Balance at 01/03/X6 2 500 000 - - 1 424 200 3 924 200 Total comprehensive income 800 000 695 800 1 495 800 Issue of share capital 500 000 1 500 000 2 000 000 Share issue expenses (150 000) (150 000) Balance at 28/02/X7 3 000 000 1 350 000 800 000 2 120 000 7 270 000 (c) ST KITTS LIMITED (EXTRACT FROM) STATEMENT OF FINANCIAL POSITION AT 28 FEBRUARY 20X7 Note C ASSETS Current assets Inventories 1 720 000 Trade and other receivables (980 000 + 15 000) 925 000 Cash and cash equivalents 2 059 200 4 779 200 EQUITY AND LIABILITIES Current liabilities Borrowings 2 000 000 Trade and other payables (400 000 + 20 000) 420 000 Current tax payable (284 200 – 200 000) 84 200 2 504 200
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Solutions to Gripping IFRS : Graded Questions Income statement disclosure Kolitz & Sowden-Service, 2009 Chapter 9: Page 2
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Solutions to Gripping IFRS : Graded Questions Income statement disclosure Kolitz & Sowden-Service, 2009 Chapter 9: Page 3 (d) ST KITTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 20X7 1. Statement of compliance These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan. Approved accounting standards comprises of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 198, provisions of and directives issued under the Companies Ordinance, 1984. In case the requirements differ, the provision of the Companies Ordinance, 1984 shall prevail. 2. Accounting policies 2.1 Basis of preparation The financial statements have been prepared using the historic cost basis, except for the revaluation of certain property, plant and equipment. 3 Share capital Authorised C 10 000 000 ordinary shares of C0.50 each Issued 6 000 000 ordinary shares of C0.50 each 3 000 000 Reconciliation of quantity of shares Qty Balance 1/3/X6 5 000 000 Issued during year 1 000 000 Balance 28/2/X7 6 000 000 4. Profit before tax The profit before tax has been computed after taking into account the following: Auditors remuneration 110 000 Depreciation of property, plant and equipment 210 000 Employee benefits expense 1 800 000 Write down of inventory to net realisable value
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This note was uploaded on 03/19/2012 for the course ACCT 100 taught by Professor Ayeshab during the Spring '12 term at Alvin CC.

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Chapter 9 - Solutions to Gripping IFRS : Graded Questions...

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