Financial position prepared by the graduate accountant

Assignment Help Financial Accounting

Reference no: EM131256786

Financial statement presentation You are a senior financial accountant at Thunder Ltd. One of the new graduate accountants has prepared the following statement of financial position as at 30 June 2016, after its first year of operations: Thunder Ltd Statement of financial position as at 30 June 2016 $000 Assets Cash at bank 124 Receivables and inventory 190 Raw materials 6 Work in progress 14 Prepaid rent 18 Shares in listed companies (at cost) 57 Share issue costs 12 Property, plant, equipment and intangibles (at cost) 597 Research costs 28 Cash management account 50 Other assets 4 Total assets 1 100 Liabilities Accounts payable and provisions 83 Allowance for doubtful debts 2 Accumulated depreciation - property, plant and equipment 59 Borrowings 56 Debentures 200 Current and deferred tax liabilities 36 Unsecured notes 100 Share capital - ordinary shares 400 Retained earnings 120 Dividends payable 44 Total liabilities 1 100 Net assets 2 200 Additional information: Share issue costs relate to the ordinary shares issued by Thunder Ltd. Research costs relate to a new research and development project being undertaken, and the directors strongly believe that the project will be successful. Where AASB 101 requires entities to disclose further sub-classifications of the minimum line items either on the face of the statement or in the notes, the directors of Thunder Ltd have advised you that they wish to disclose these sub-classifications in the notes and only report the minimum line items on the face of the statement. Required: Review the statement of financial position prepared by the graduate accountant. Discuss what corrections / changes need to be made to the statement of financial position, to ensure that it complies with the requirements of AASB 101. Provide references to relevant paragraphs in the accounting standards where appropriate to support your answers. Note: You are not required to discuss any note disclosures that are needed, or prepare a revised statement of financial position. Question 1 Max. marks awarded Discuss corrections / changes needed 12 References 3 Total 15

Reference no: EM131256786

Questions Cloud

Calculate the present value of the minimum lease payments : It is argued by some researchers that even in the absence of regulation, organisations will have an incentive to provide credible information about their operations and performance to certain parties outside the organisation; otherwise, the costs of ..

Inappropriate behavior and violations of your firms code : You are aware of inappropriate behavior and violations of your firm's code of conduct throughout your operation. In n effort to support a collegial and positive atmosphere, however, you do not encourage co- workers to report on their peers. How would..

Accounting standard-differences in requirements are logical : We have a separate accounting standard, AASB 138, that specifically deals with intangible assets and it provides different requirements from those for property, plant and equipment (the rules for which appear in AASB 116). What is it about intangible..

Prepare the journal entries to account for the entries : Accounting for share issues and options Sunny Ltd is looking to expand its operations, and in order to do this, the company needs to increase equity. On 1 January 2016, Sunny Ltd offered 4,000,000 ordinary shares to the public at an issue price of $3..

Financial position prepared by the graduate accountant : Financial statement presentation You are a senior financial accountant at Thunder Ltd. One of the new graduate accountants has prepared the following statement of financial position as at 30 June 2016, after its first year of operations: Review the s..

Compute cost assigned to ending inventory using fifo-lifo : Montoure Company uses a perpetual inventory system. It entered into the following calender-year 2015 purchases and sales transactions. Compute cost of goods available for sale and the number units available for sale. Compute the cost assigned to endi..

A prepaid account is an expense account : At December 31, 2016, Company A has assets of $430,000 and liabilities of $205,000. Based on this information and your understanding of the accounting equation, which of the following statements are true? A prepaid account is an expense account. Cons..

Accounts receivable comes before equipment : The accounts of Lake Oaks Pool Service, Inc., follow with their normal balances at April 30, 2014. The accounts are listed in no particular order. Prepare the company’s trial balance at April 30, 2014, listing accounts in proper sequence, as illustra..

Events on the accounting equation of the medical practice : Dr. Rebecca Gray opened a medical practice specializing in physical therapy. During the first month of operation (January), the business, titled Dr. Rebecca Gray, Professional Corporation (P.C.), experienced the following events: Analyze the effects ..

User Account

All Pages