Evaluate the impact of the following errors on the financial statements for the year ended 31.12.20X3, the
Question:
Evaluate the impact of the following errors on the financial statements for the year ended
31.12.20X3, the corporate income tax rate is 20%:
1. The enterprise liquidated fixed assets used for sale at their original cost of VND
240,000,000 (depreciated at VND 220,000,000) in February, 20X3, but not yet
recorded a decrease in fixed assets, but continued to calculate depreciation. The
depreciation rate of this asset is 10%/year. The proceeds from the sale of this
property are VND11,000,000 (this price includes 10% value added tax).
Accountants record entries after selling fixed assets:
Debt: 11,000,000
Cr Administration expenses: 10,000,000
Cr VAT: 1,000,000.
2. Construction work warehouse worth 900,000,000 VND was completed and
transferred to fixed assets in February 20X3. The test results show:
- The company did not capitalized the interest expense in the value of warehouse of
VND 60,000,000. The company has recorded in financial expenses in the period.
- The consulting and design costs of ACD Company has not been capitalized in the
value of the Warehouse which is 42,000,000 VND (Price paid and not deductible
value added tax). An advance for ACD of VND 30,000,000 is still "hanging" as an
advance payment to the supplier.
- This fixed asset has a depreciation rate of 6% per annum, which is included in
administrative expenses.
Statistics for Business and Economics
ISBN: 978-0134506593
13th edition
Authors: James T. McClave, P. George Benson, Terry Sincich