Unformatted text preview: repare H Ltd consolidated balance sheet and income statements for the year
ended December 31, 2002. Worksheets for the consolidation are attached in this exam
paper. You are advise NOT TO ATTEMPT this part until you have finished all the
(10 bonus marks) (TOTAL FOR QUESTION 3 – 21 MARKS and 10 BONUS MARKS) QUESTION 4 The current accounting policy adopted by Happiest Company Ltd is to expense all
borrowing costs in the period in which the costs are incurred. Happiest is in the
residential property development business.
During the year, a new CEO was appointed and she noted that the other companies in
her industry had a different accounting policy with regards to borrowing costs - they
capitalise these costs. The CEO convened a meeting with the Board of Directors and
after much discussions, the Board agreed to change the Company's policy on
The CEO determined that the following borrowing costs relating to ongoing
residential property developments had been charged to the profit and loss accounts:
$40,000 It is now February 2003 and the Finance Manager had prepa...
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This document was uploaded on 04/07/2014.
- Spring '14