could you answer question a , b , c , d and e

You are starting up your own business as a corporation with 6 share capital. Each of you invests SAR 40,000 cash in your shares, with each share having a value of SAR100. Your agreement is that at the end of the year you will distribute earnings through a dividend of SAR 4 per share, if your cash balance is more than 50% of the initial balance invested.

The operation you are starting up is an online store, and you are planning to sell household goods home design pieces. Since you are a new business, you are starting with the same kind of mug that is decorated to with the customer name in calligraphic style writing. Adding the name costs SAR 1 per mug (material), and you have hired a calligrapher full-time for this task. Their salary is SAR 5,000 a month. Importantly, the calligrapher has developed a special type of font that makes your mugs unique, and has spent about 1 month worth of work doing so.

You also have hired a website developer, SAR 10,000 a month, but all other tasks (distribution, sales management, administration and warehouse) are taken care of by you as the owner team. To store your mugs and run operations, you have rented a small space for SAR 10,000 a month, inclusive of utilities. However, you have purchased equipment for the calligraphy, warehouse and all other operations of SAR 60,000. All equipment is expected to be useful for 5 years, and be evenly used throughout this time period.

The mugs you purchase from a supplier abroad, cost per mug, including shipping, SAR 2. You charge SAR 12 per mug with a regular font and SAR 16 per mug with the special font.

In the first year of operations, these are monthly sales volume figures: Jan: 100

Feb: 80

Mar: 120

Apr: 150

May: 200

June: 200

Jul: 100

Aug: 100

Sept: 500 (incl 100 regular, plus 400 special order from a local school) Oct: 200

Nov: 200 Dec: 200

The business used the special font for the special order and charged SAR14 per mug, since this was a bulk order. According to this, a new customer requested a special order of 1000 mugs, paid upfront, to be delivered in January of the next year.

The business also pays rent upfront for a year from 1 July to 30 June.

Finally, the business is currently thinking about purchasing land to build their premises on the land.

Follow the regular accounting cycle and set-up the accounting recording accordingly. Prepare financial statement plus basic notes for the financial year 1 Jan to 31 Dec, in line with IFRS, and advise on the following:

a) According to IFRS, how should they deal with the rent payment? Explain your choices in your own words.

b) According to IFRS, how should they deal with the specially developed calligraphy font?

c) The business wants advice on whether to follow historic cost or revaluation for the land it is thinking to buy and all other assets it deals with. According to IFRS, provide comprehensive advice on how they can apply the revaluation approach, if at all.

d) Based on year 1, what is the businesss sustainable growth rate?

e) The business thinks about acquiring another, related, business that will take over the sales function in a busy shopping zone (new Diriyah development in Riyadh). This is a

successfully running business whose owner wants to move on to a new venture. It has had stable profits over the previous three years, around SAR50k per year. On the basis of IFRS, advise how to approach the acquisition, if at all.

You are starting up your own business as a corporation with share capital. Each of you invests 3AR 40,000 cash in yoor thates, with each share having a value of $4h100. Your ageement is that at the end of the vear pou will ditribute earningi theauch a dividend of SAR 4 per thare, if your carh balance is more than 50s of the initial balance invested. The operation you are starting up is a online store, and you are planting to sell sousehold coods home desien pieces. Sioce you are a new husiness, you are starting with the same kind of mug that is decoeated to with the cuttomer name in callegraphic style writie, for this cask. Their alaty is SAA 5,000 a month. importanely, the calligapher has speleped a special type of font that makes your mugs veique, and har spent about 1 moeth worts of work doing so. You alio have hired a website developer, 5AR 10,000 a month, but all other tasks (distributien, rales manageme-t, adminitration and warehouse) are taken care of by you as the owner team. To itare your muge and run operatices, you have rented a small ipace for SAR 10,000 a menth, inclusve of ufilties. Howeret, vou have purchased eguipment for the calleprophy, warehouse and all other operations of SAR 60,000 . All equipment is eapected to be useful foe 5 years, and be evenly vsed theoughout this time period The mug you purchale from a susplier ahepad, tort per mugh inchefing kipping. SAE 2. Ves thange 34012 per mug with a regular font and sAt 16 per mug with the special foot. in the frit pear of operations, these ace monthly sales volume figures: fanc 100 Febe 80 Mar: 120 Apr. 150 May: 200 lune: 200 fut: 100 Auz 100 Septi 300 lintl 100 regular, plas 600 special order from a locat school] Dct: 200 Nav: 200 Deci 200 The business used the special font for the special order and charged sacis per magy. unce this was a bulk order Actociling to this, a new cortomer requested a special erder of 1000 mugh, paid upfroet, to be delivered in lanuary of the next year. The business ako parys tent eptront for a year from 1 july to 30 june. Firally, the business is currently thinbing about purchaning land to build their premines on the land. Follow the regular accounting oycle and set-up the accounting recording accordindy. Prepare tieancial statement ples basic notes for the financial vear 1 ant lo 11 Dec, it lne with ifits, and atvise en the following: a) Accoeding to IFRS, how thould they deal mith the rent payment? Explain pour choices in yose own words. b) According to Ifa5, how thould they deal with the specially developed caligraphy fisen? c] The bunineis wants atrice on whether to fellow Nitoric cost or tevaluatien for the Gend a is thieking to buy and al other assets it deals with. Accordere to IFRS, provide comprehenshe advice on how they can apply the revaluation appeosch, t at all d) Bared on year 1 , what is the business's wotainable erwwth cate? e) The butinest thinks about atedining another, related, busitess that will alate over the uales function in a buiy shopping zone (new Dinyah development in flupath). This is a iuctestifully running buineis whove owher wants to meve on to a new virtare. A kas had stable protics over the previous three yeaes, around 545501 per yeat. On the basis of IFRS, advise how to aooroach the acquinition. if at al. Volume \begin{tabular}{|l|r|} \hline Jan & 100 \\ \hline Feb & 80 \\ \hline Mar & 120 \\ \hline Apr & 150 \\ \hline May & 200 \\ \hline Jun & 200 \\ \hline Jul & 100 \\ \hline Aug & 100 \\ \hline Sep* & 500 \\ \hline Oct & 200 \\ \hline Nov & 200 \\ \hline Dec & 200 \\ \hline \end{tabular}