On 01 July 2016, Aiden Limited decided to change its accounting policy in order to expense...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On 01 July 2016, Aiden Limited decided to change its accounting policy in order to expense finance costs as a period cost instead of capitalising them as was previously done. The effect of this change on the annual financial statements has been summarised as follows: Finance costs Old policy: New policy: 2014 RO R60 000 2015 RO R68 000 2016 R 2016 The following are draft financial statements for the year ended 31 December 2016 before adjusting for the change in accounting policy. 1 600 000 690 000 910 000 1 000 000 1910 000 RO R36 000 2015 R Net profit before tax Taxation Net profit after tax Retained earnings at the beginning of the year Retained earnings at the end of the year Assume a tax rate of 30% throughout all affected years. Required: Disclose the change in accounting policy in the financial statements for the year ended 31 December 2016, in accordance with International Financial Reporting Standards. 1 400 000 640 000 760 000 240 000 1 000 000 On 01 July 2016, Aiden Limited decided to change its accounting policy in order to expense finance costs as a period cost instead of capitalising them as was previously done. The effect of this change on the annual financial statements has been summarised as follows: Finance costs Old policy: New policy: 2014 RO R60 000 2015 RO R68 000 2016 R 2016 The following are draft financial statements for the year ended 31 December 2016 before adjusting for the change in accounting policy. 1 600 000 690 000 910 000 1 000 000 1910 000 RO R36 000 2015 R Net profit before tax Taxation Net profit after tax Retained earnings at the beginning of the year Retained earnings at the end of the year Assume a tax rate of 30% throughout all affected years. Required: Disclose the change in accounting policy in the financial statements for the year ended 31 December 2016, in accordance with International Financial Reporting Standards. 1 400 000 640 000 760 000 240 000 1 000 000
Expert Answer:
Answer rating: 100% (QA)
The image shows a scenario where Aiden Limited has decided to change its accounting policy to expense finance costs as a period cost instead of capitalizing them as was done previously To disclose thi... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1119048541
11th Canadian edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
Posted Date:
Students also viewed these accounting questions
-
Question 1 This question has two parts, (A) and (B). Answer both parts. 100% Liverpool plc is a company that manufactures a number of different types of electrical goods and has a year end of 31...
-
CDS Inc. is entering the declining state of its life cycle. The current dividend is $5 per share. The dividend is not expected to grow (remain constant) in the next ten years, then a negative growth...
-
1. As a policy maker you should never worry much about those are eligible for Medicaid benefits and do not enroll. This is because they will enroll in public insurance if they need it. True or False?...
-
Is it possible to move in a curved path in the absence of a force? Discuss why.
-
Let M(x) be a companys marginal cost at production level x. Give an economic interpretation of the number 0 100 M(x)dx.
-
Which of the following is an activity not usually associated with forensic accounting and fraud examination consulting and litigation support? 1. A. Assessing fraud risk associated with internal...
-
The trial balance of Avtar Sandhu Co. shown below does not balance. Each of the listed accounts has a normal balance per the general ledger. An examination of the ledger and journal reveals the...
-
Activity 3 Response: As an investigation of scientific question B, consider an object that is not the human body, but that also has a consistently higher temperature than the environment. Based on...
-
On 1 April 2020, Avon Ltd acquired 60% of the equity share capital of Savoi at 9.6 million. Below are the summarised draft financial statements of both companies. Avon and Savoi Statements of Profit...
-
We have a rectangular grid of points where one corner is (0,0) and the other corner is (W, H), where W, H represent the width and height of the grid, respectively. From each point (x, y), we can move...
-
Explain, using an appropriate graph how perfect price discrimination by a monopolist is efficient.
-
Victor Gomez has served as supervisor of the account payable section of this firm for the past ten years. Gomez takes great pains to see that all invoice details are checked twice by his accounting...
-
A three hinged parabolic unsymmetrical arch has a span of 16 m carries an inclined concentrated load of 30+X kN as shown in Figure 5. Member BD carries a uniformly distributed load with a magnitude...
-
Question Three years ago, you purchased a 30-year, $1,000 par value bond for a quoted price of 95.0. The bond pays its 5% coupon semi-annually. a) If the present market rate on identical bonds is 4%,...
-
Say, there are five possible grades, A, B, C, D and F for grading discrete mathematics N = X/2 [N will be integer] Here, X = 1 i) If at least (5+N) students receive the same grade, find the minimum...
-
Write a program that initializes an array. It inputs a value from the user and searches the number in the array.
-
Roux Corp. had a Deferred Tax Asset account with a balance of $81,000 at the end of 2016 due to a single temporary difference of $270,000 related to warranty liability accruals. At the end of 2017,...
-
Sporon Corp. is a fast-growing Canadian private company involved in the manufacturing, distribution, and retail of specially designed yoga and leisure wear. Sporon has recently signed 10 leases for...
-
The common shares of Hoover Inc. are currently selling at $143 per share. The directors want to reduce the share price and increase the share volume before making a new issue. The per share carrying...
-
In a hypothesis test the p value is 0.043. This means that we can find statistical significance at: (1) both the 0.05 and 0.01 levels (2) the 0.05 but not at the 0.01 level (3) the 0.01 but not at...
-
In testing the null hypothesis that p = 0:3 against the alternative that p 0:3, the probability of a type II error is ______ when the true p = 0:4 than when p = 0:6. (1) the same (2) smaller (3)...
-
An article states there is no significant evidence that median income increased. The implied null hypothesis is: (1) Median income increased. (2) Median income changed. (3) Median income did not...
Study smarter with the SolutionInn App