West Co.'s 2016 financial statements were authorized for issue by its directors on 28 April 2017...

 

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• West Co.'s 2016 financial statements were authorized for issue by its directors on 28 April 2017 and the annual general meeting will be held on 1 June 2017. Slow moving inventories held at one of its warehouses were valued at its cost of $350,000 at 31 December 2016. On 4 April 2016, 70% of this inventory was sold for $120,000 on which West Co.'s sales staff earned a commission of $10,000. ii. On 1 January 2018. an entity borrowed $12 million for the construction of a building that is estimated to cost $30 million. Only $5 million was utilised during the year and the balance of $7 million was invested temporarily in a fixed deposit which yielded an interest of 5% per annum. Total interest accrued on the borrowing of $12 million for the year 2016 was $0.84 million For each of the above situation: į iii. Hazelnut Col. leased out tangible non-current assets as operating leases. At 1 January 2016, the carrying amount of such assets was $40 million while the remaining useful life was 10 years. These assets were leased out on operating leases that have recently expired. On 31 December 2016, the company is undecided to whether sell or lease the assets to customers under operating leases but wants to recognise it as held for sale. The fair value less selling costs of the asset is $37 million and the value in use is estimated at $38 million. Identify the relevant MERS. Explain the accounting treatment Prepare relevant journal entries (note: for the financial year-end is 31 December 2016) • West Co.'s 2016 financial statements were authorized for issue by its directors on 28 April 2017 and the annual general meeting will be held on 1 June 2017. Slow moving inventories held at one of its warehouses were valued at its cost of $350,000 at 31 December 2016. On 4 April 2016, 70% of this inventory was sold for $120,000 on which West Co.'s sales staff earned a commission of $10,000. ii. On 1 January 2018. an entity borrowed $12 million for the construction of a building that is estimated to cost $30 million. Only $5 million was utilised during the year and the balance of $7 million was invested temporarily in a fixed deposit which yielded an interest of 5% per annum. Total interest accrued on the borrowing of $12 million for the year 2016 was $0.84 million For each of the above situation: į iii. Hazelnut Col. leased out tangible non-current assets as operating leases. At 1 January 2016, the carrying amount of such assets was $40 million while the remaining useful life was 10 years. These assets were leased out on operating leases that have recently expired. On 31 December 2016, the company is undecided to whether sell or lease the assets to customers under operating leases but wants to recognise it as held for sale. The fair value less selling costs of the asset is $37 million and the value in use is estimated at $38 million. Identify the relevant MERS. Explain the accounting treatment Prepare relevant journal entries (note: for the financial year-end is 31 December 2016)

Answer rating: 100% (QA)

i MERS West Co IAS 16 Property Plant and Equipment IAS 18 Revenue IAS 2 Inventories Hazelnut Co IAS ... View the full answer