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Question

Apollo Ltd. reported the following information concerning its performance for the current year. Apollo is a

manufacturing firm and has reported that it was selling one of its many production divisions, Product X. Selected information:

• Net Income (before tax) from sales from Product X $20,000

• Revenue (from all other product divisions) $2,500,000 (before tax).

• Cost of Sales (from all other product divisions) $950,000 (before tax).

• Other expenses (from all other product divisions - before tax) $1,025,000

• Gain on sale of equipment (which produced product Y) $5,000 (before tax)

• Gain on sale of equipment that produced product X $3,000.

• Tax rate 30%

(i) Prepare the Income Statement as reflected in AASB 5 from the above information.

(ii) Why is it important for firms to report as required by AASB 5? (Refer to AASB5, paragraphs 31-33)

Top Answer

(i) Income statement according to AASB 5 states that the income earned from discontinued operation must be shown separately... View the full answer

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