KKK is startup electric appliance manufacturer which has three main products in

the brand of WEM - Air conditioners, Washing machines and Refrigerators. In the

production of air conditioners and washing machines, KKK has to purchase components

used in production from various suppliers. For refrigerators, KKK imports refrigerators

from Vietnam and sells them as the brand of WEM

If you are the head of accounting department of this company, please clearly

explain these following issues related to IAS 2 - Inventory.

1) Could you define these three main products as KKK's inventory?

2) Explain pros and cons if KKK applied the perpetual inventory system to record

transactions related to inventory.

3) Explain the most suitable method to compute the cost of three main products.

4) According to 3), define costs which should be included in the cost of three main

products.

5) Explain the end-of-period accounting processes which should be applied to KKK.

6) According to IAS 2, how does KKK report the value of inventory at the end of fiscal

year?

Question 2

ACCFIX is an accounting firm is in Canada and provides accounting service to MTN

company. ACCFIX company wants to acquire real estate and needs some advices. If you

are stuff of ACCFIX accounting firm, please clearly give advices to MTN company with

these following issues related to IAS 16 - Property, Plant and Equipment.

1) Explain the definition of real estate and provide examples of real estate.

2) Explain the initial recognition of real estate and define costs which should be

included in the cost of real estate.

3) Explain the subsequent recognition of real estate if MTN company uses Cost

model. How should MTN report this account in the statement of financial

position?

4) Explain the most suitable calculation method of depreciation if MTN needs the

highest net income in statement of profit or loss.

Question 3

TOOLS4U company acquired building in the last year. This building has 3 floors

and TOOLS4U will use the 2nd and 3rd floor to be his office. The 1st floor will be rent to

SMG. Then, SMG renovated and built additional parts to operate new

restaurant.

According to the above-mentioned story, please clearly explain these following

questions:

1) In accordance with related IFRS standards, how does TOOLS4U company

recognize this building?

2) Explain how different between the recognition of 1st floor under IAS 16 and the

recognition of 1st floor under IAS 40 when using Revaluation model in these two

situations:

a. An increase of fair value at the end of fiscal year

b. A decrease of fair value at the end of fiscal year

Question 4

SWANGRTI Corporation

Statement of financial position

For year ended on December 31, 2021.

Cash and cash equivalents 10,000

Loan receivables 10,000

Prepaid expenses 10,000

Accounts receivables 10,000

Other receivables 10,000

Plant and Equipment 15,000

Less: Accumulated depreciation (5,000) 10,000

Property 20,000

Total Assets 80,000

Accounts payable 10,000

Loan payable 10,000

Other payable 10,000

Bonds payable 10,000

Common stock 30,000

Retained earnings 10,000

Total Liabilities and Equities 80,000

Required:

1) Is the above statement of financial position prepared following eight general

principles provided by IAS 1 - Presentation of financial statement?

2) According to 1), please show me the correct form of statement of financial

position if we prepare following IAS 1 - Presentation of financial statement.

3) To be the most useful to users of financial statements, what characteristics of

financial information should be included in?

Answer rating: 100% (QA)

Here are the responses to the questions Question 1 1 Yes KKKs three main products air conditioners washing machines and refrigerators can be defined as KKKs inventory Inventory is assets held for sale ... View the full answer