1. Present value

Using the appropriate annuity formula and assuming 12% annual interest rate, determine the present value on 31 December, 2013, of a five-period annual annuity of $5,000 under the following situations:

1. The first deposit is made on 31 December, 2014, and interest is compounded annually.
2. The first deposit is made on 31 December, 2013, and interest is compounded annually.

2. E3-7 Discontinued operations

Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by IFRS. The farm equipment component had been unprofitable, and on September 1, 2023, the company adopted a plan to sell the assets of the division. The actual sale was effected on December 15, 2023, at a price of $600,000. The book value of the division's assets was $1,000,000, resulting in a before-tax loss of $400,000 on the sale.

The division incurred a before-tax loss from operations of $130,000 from the beginning of the year through December 15. The income tax rate is 20%. Chances after-tax profit from its continuing operations is $350,000.

Required:

Prepare a statement of profit or loss for 2023 beginning with profit from continuing operations. Include appropriate EPS disclosures assuming that 100,000 ordinary shares were outstanding throughout the year.

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