Reference no: EM133037050
Question - M Ltd is preparing its draft financial statements for the year ended 31 March 2020. Draft profit for the year was £1,671,400. The following outstanding issues have been identified.
(1) The draft financial statements for the year ended 31 March 2020 included the correct figure for inventories of raw materials. However, no figure for inventories of finished goods was included in the draft totals. The production manager made the following notes:
Finished goods
J - 400 units counted. 4,000 were produced during the year although production was expected to be 5,000 units. Production costs were:
£
Materials 32,000
Direct labour 20,000
Variable overheads 12,000
Fixed overheads 7,500
A - 150 units counted. A costs £20 per unit to produce. However, due to technological advances by competitors they were being sold for only £12 per unit from March 2020.
(2) On 1 April 2019 a full review of the operating capabilities of M Ltd's machinery was carried out. One machine was identified as requiring significant maintenance work to continue operating at the required level. This was because routine maintenance work had not been carried out.
The work was carried out immediately at a cost of £5,000, crediting cash and debiting property, plant and equipment. The machine's remaining useful life was reassessed as being 10 years at 1 April 2019 and was being depreciated on a straight-line basis. At 31 March 2020 the machine's carrying amount was £39,000.
The machine was assessed at 31 March 2020 as having a fair value of £30,000 with costs to sell estimated at £1,000 and a value in use of £32,000.
(3) A review of customer contracts during the year identified one customer, P Ltd, has significantly longer credit terms than M Ltd's other customers. On further investigation, it was discovered that P Ltd is owned by the daughter of F, one of M Ltd's directors. Sales of £25,000 were made to P Ltd during the year and there was a balance of £9,000 due from P Ltd at 31 March 2020.
At 1 April 2019 M Ltd had 400,000 £1 ordinary shares in issue. On 1 July 2019 the company made a 1 for 4 bonus issue.
On 1 January 2020, 50,000 ordinary shares were issued at full market price of £2.70 per share.
Required - Explain the required IFRS financial reporting treatment of Issues (1) to (4) above in M Ltd's financial statements for the year ended 31 March 2020, preparing all relevant calculations.
|
Significance of occupational hygiene in business
: 1. Provide your opinion on how the provisions of the Basel Committee on Banking Supervision have affected risk evaluation?
|
|
Determine the number of typists involved in the survey
: A survey showed that 30 typists used a word processor, 25 are audio typists and 28 are shorthand writers. Determine the number of typists involved in the survey
|
|
Record Wayne admission for each independent situations
: Record Wayne's admission for each of the following independent situations:- Wayne directly purchases half of Merina's investment in the partnership for $98,000
|
|
Compute the value of the lease liability to the lessee
: The cost of the machinery is $1,050,000, and the fair value of the asset on January 1, 2019, is $1,400,000. Compute the value of the lease liability to lessee
|
|
Explain the required ifrs financial reporting treatment
: Explain the required IFRS financial reporting treatment of Issues (1) to (4) above in M Ltd's financial statements for the year ended 31 March 2020
|
|
Insider compromise or social engineering
: What are some examples of insider compromise or social engineering attacks you have seen on TV or read about in the news?
|
|
Determine amount of accounts receivable company will report
: The company had $280,000 in accounts receivable on July 1. Determine the amount of accounts receivable the company will report
|
|
How Ochi Limited should be treated in consolidated accounts
: The share capital of Ochi Limited was $24,000,000 in ordinary shares of $4 each. How Ochi Limited should be treated in consolidated accounts
|
|
Prepare a schedule of expected cash collections from sales
: February sales totaled $390,000, and March sales totaled $420,000. Prepare a schedule of expected cash collections from sales, by month and in total
|