Amman Company began on 1 January, 2014, it prepare its financial statements to 31 December. During 2017, the company decided to change its accounting policy concerning one of its expenses. Total operating expenses calculated using previous accounting policy compared with new accounting policy for the first three year of operation were as follows:

$000	operating expenses calculated using previous accounting policy	operating expenses calculated using new accounting policy
year to December 2014	240	390
year to December 2015	260	310
year to December 2016	290	250
Total	790	950

A summary of the company statement of comprehensive income for the year to 31 Dec. 2017 (before adjusting figures to reflect the change in accounting policy and after applying new policy on 2017)

$000	2017	2016
profit before operating exp.	1510	1450
Operating exp.	190	290
profit before tax	1320	1160
Tax	264	232
profit after tax	1056	928

Retained earnings reported to 2371000 on 31 Dec. 2016. No dividends and tax rate is 20%.

Requirement

1- Rewrite the extract from the statement of comprehensive income so as to reflect the change in accounting policy, in accordance with IAS8.

2- Prepare an extract from the company statement of change in equity for the year to 31 Dec. 2017, showing change to retained earnings.

Answer rating: 100% (QA)

Answer Statement of Comprehensive Income For The Year ended Dec 31 201... View the full answer