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a) IFRS 9: Financial Instruments The Company issued 22% GHS50 million 4 year Corporate Bond at a discount of 5% on 1 January 2020. Issue costs were GHS1,534,000. The Bonds would be redeemed on 31 December 2023 at par. Interests are paid annually in arrears at 31 December and the effective interest rate is thus determined as 25% per annum. b) IAS 23: Borrowing Costs The Company borrowed GHS24 million from Classic Bank on 1 January 2020 at an interest rate of 20% per annum specifically to build a new Administration Block. The contract price agreed with the Contractor was GHS24 million. The construction commenced in the first week of January 2020. The payment schedule agreed between the Company and Consar Ltd was as follows: 1 January 2020 [GHS4 million], 1 April 2020 [GHS8 million]; 1 October 2020 [GHS8 million]; and 31 December 2020 [GHS4 million]. The Company decided to invest idle funds of the borrowed money temporary in fixed deposit at annual interest rate of 15%. The building was completed in the last week of December 2020 and put to use on 2nd January 2021. c) IAS 16: Property, Plant and Equipment The Company constructed a Waste Disposal Plant in January 2020 at a cost of GHS50 million . It was agreed with the owner of the plant site that the plant would be de-commissioned in December 2022 (after three years of usage). The Engineers of the Company estimate the decommissioning costs to be GHS1 million in December 2022. (The annual cost of capital to the Company is taken to be 25% ). d) IAS 40 : Investment Property The Company acquired a property on 1 January 2015 at a cost of GHS200,000 and immediately occupied it as office premise. On acquisition, it was estimated to have a useful life of 50 years. Subsequent to its acquisition, the asset was measured at depreciated cost until 1 July 2020 when Management decided to convert the building into an investment property (mainly for rentals). Following this decision, the property was fair valued at GHS 190,000. QRS adopted the fair value model for subsequent measurement of the investment property. At 31 December 2020, it was fair valued at GHS195,000. e) IAS 38: Intangible Assets The Company adopts fair value model for subsequent measurement of its intangible assets. An intangible asset with an estimated useful life of 9 years was acquired on 1 January 2019 for GHS450,000. It was revalued to GHS544,000 on 31 December 2019 and the revaluation surplus was correctly recognized on that date. As at 31 December 2020, the intangible asset was revalued at GHS320,000 Required
Problem 1: Explain (together with relevant calculations) how each of the above transactions would be dealt with in the 2020 statement of profit or loss and the statement of financial position as at 31 December 2020 [with reference to respective IFRS)
$400,000 at the end of the third year. If these are the only cash flows from this new product, what was Island's return on their investment in this product?
Read the ethics reflection at the beginning of Chapter 1. It concerns the Penn State child abuse scandal. Consider the following questions and add your own observations to the analysis. What would you have done if you had been in Joe Paterno’s positi..
A company has an original capital structure of; $50,000 in Total Debt and $100,000 in Equity. Find new Cost of Capital for company new Capital Structure
Company X suffered a $350,000 NOL in 2014. The company will carryback this NOL two years (2012 net income = $60,000 and 2013 net income = $110,000) and carryforward the remaining NOL to 2016, a year in which the company expects it's net income to be ..
The broker requires a 49% margin and says the margin call will happen at 40%. At what stock price will you receive the margin call?
If its current net income is $10 per share and it has 1.5 million shares outstanding, what is the value of its P/E ratio
What is Tailor Johnson's U.S. tax liability on its Ethiopian subsidiary? Tailor Johnson, a U.S. maker of fine menswear, has a subsidiary in Ethiopia
Calculate the amount of bond discount or premium that is amortized with each interest payment. Enter as a whole number (no cents).
Moorpark Inc. purchases a machine on January 31, 2014 and puts it into use immediately.The machine cost $28,000 and has a salvage value of $4,000.It has a 4-year useful life.The company’s fiscal year ends on December 31. Calculate the carrying value ..
If the U.S. is not selected, she believes that Sunnyside's share price would fall significantly. Determine the profit per share on the straddle strategy
Metlock, Inc. began the year 2022 , Based on this information, what should the transaction analysis show for total stockholders' equity at the end of 2022?
Uxmaiz Corporation had only one job in process during May—Job X32Z—and had no finished goods inventory on May 1. Job X32Z was started in April and finished during May. Data concerning that job appear below: Using the direct method, what is the cost o..
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