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Sasasila Ltd has been operating profitably for a number of years. However, in recent times, the company has been making losses. Below is the statement of financial position as at 30 June 2019:
| Assets | GH¢000 |
|---|---|
| Non-Current Assets | |
| Patents and copyrights | 75,000 |
| Land and buildings (net) | 200,000 |
| Plant and machinery (net) | 150,000 |
| Current Assets | |
| Inventories | 125,000 |
| Trade receivables | 125,000 |
| Bank | 37,500 |
| Investments (cost) | 100,000 |
| Total Assets | 812,500 |
| Equity and liabilities: | |
| Equity | |
| Ordinary share capital (issued at GH¢10 each) | 375,000 |
| 20% cumulative preference shares (issued at GH¢10 each) | 175,000 |
| Retained earnings | (75,000) |
| Non-current Liabilities | |
| 15% Debentures | 125,000 |
| Current Liabilities | |
| Interest on debentures | 18,750 |
| Trade payables | 93,750 |
| Provision for business restructuring | 50,000 |
| Provision for legal damages & claims | 12,500 |
| Provision for warranties | 37,500 |
| Total Equity and Liabilities | 812,500 |
Additional relevant information: The following scheme of reconstruction was approved by all parties as well as the High Court with the exception of only one ordinary shareholder:
Prepare the Capital Reduction Account as at 30 June 2019.
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Find Related Questions by Tags, levels, etc.
In accordance with Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), the residual interest in the assets of the entity after deducting all its liabilities is termed:
A. Liability
B. Provision
C. Equity
D. Assets
E. Reserves
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Which of the following elements is directly related to the measurement of an entity’s financial position?
A. Performance, income, and expenses
B. Income, expenses, and equity
C. Performance, income, and equity
D. Assets, liabilities, and equity
E. Assets, liabilities, and performance
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Adeyemi Boat Shop bought a N70,000 electric hoist to lift engines out of boats. The Boat Shop paid N20,000 in cash for the hoist and signed a note to pay the balance in 90 days. This transaction will cause:
A. The Boat Shop’s assets to increase by N70,000 and liabilities to increase by N50,000.
B. No change in owners’ equity but a N50,000 increase in both assets and liabilities.
C. Assets to increase by N50,000 and owners’ equity to decrease by the same amount.
D. No change in total assets, but a N50,000 increase in liabilities.
E. Both assets and liabilities decrease by N50,000.
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Find Related Questions by Tags, levels, etc.
The International Accounting Standards Board (IASB) Conceptual Framework describes the elements of financial statements as broad classes of financial effects of transactions and other events.
i. Explain five elements of financial statements.
ii. State four models of measurement of the elements of financial statements.
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A present obligation of an entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits, is known as:
A. An asset
B. A provision
C. A liability
D. A payable
E. A receivable
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Find Related Questions by Tags, levels, etc.
Sasasila Ltd has been operating profitably for a number of years. However, in recent times, the company has been making losses. Below is the statement of financial position as at 30 June 2019:
| Assets | GH¢000 |
|---|---|
| Non-Current Assets | |
| Patents and copyrights | 75,000 |
| Land and buildings (net) | 200,000 |
| Plant and machinery (net) | 150,000 |
| Current Assets | |
| Inventories | 125,000 |
| Trade receivables | 125,000 |
| Bank | 37,500 |
| Investments (cost) | 100,000 |
| Total Assets | 812,500 |
| Equity and liabilities: | |
| Equity | |
| Ordinary share capital (issued at GH¢10 each) | 375,000 |
| 20% cumulative preference shares (issued at GH¢10 each) | 175,000 |
| Retained earnings | (75,000) |
| Non-current Liabilities | |
| 15% Debentures | 125,000 |
| Current Liabilities | |
| Interest on debentures | 18,750 |
| Trade payables | 93,750 |
| Provision for business restructuring | 50,000 |
| Provision for legal damages & claims | 12,500 |
| Provision for warranties | 37,500 |
| Total Equity and Liabilities | 812,500 |
Additional relevant information: The following scheme of reconstruction was approved by all parties as well as the High Court with the exception of only one ordinary shareholder:
Prepare the Capital Reduction Account as at 30 June 2019.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
In accordance with Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), the residual interest in the assets of the entity after deducting all its liabilities is termed:
A. Liability
B. Provision
C. Equity
D. Assets
E. Reserves
Find Related Questions by Tags, levels, etc.
Which of the following elements is directly related to the measurement of an entity’s financial position?
A. Performance, income, and expenses
B. Income, expenses, and equity
C. Performance, income, and equity
D. Assets, liabilities, and equity
E. Assets, liabilities, and performance
Find Related Questions by Tags, levels, etc.
Adeyemi Boat Shop bought a N70,000 electric hoist to lift engines out of boats. The Boat Shop paid N20,000 in cash for the hoist and signed a note to pay the balance in 90 days. This transaction will cause:
A. The Boat Shop’s assets to increase by N70,000 and liabilities to increase by N50,000.
B. No change in owners’ equity but a N50,000 increase in both assets and liabilities.
C. Assets to increase by N50,000 and owners’ equity to decrease by the same amount.
D. No change in total assets, but a N50,000 increase in liabilities.
E. Both assets and liabilities decrease by N50,000.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
The International Accounting Standards Board (IASB) Conceptual Framework describes the elements of financial statements as broad classes of financial effects of transactions and other events.
i. Explain five elements of financial statements.
ii. State four models of measurement of the elements of financial statements.
Find Related Questions by Tags, levels, etc.
A present obligation of an entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits, is known as:
A. An asset
B. A provision
C. A liability
D. A payable
E. A receivable
Find Related Questions by Tags, levels, etc.
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