F1 Exam Dumps : Financial Reporting

An entity opens a new factory and receives a government grant of $25,000 towards the cost of new plant and equipment. This new plant and equipment originally costs $100,000.

The entity uses the net cost method allowed by IAS 20 Accounting for Government Grants and Disclosure of Government Assistance to record government grants of this nature. All plant and equipment is depreciated at 20% a year on a straight line basis.

Calculate the amount of depreciation to be included for this plant and equipment in the statement of profit of loss for the factory's first year of operation.

Give your answer to the nearest whole $.

In accordance with the Conceptual Framework for Financial Reporting, which of the following describes the historical cost measurement basis for an asset?

RST operates in Country X where the tax rules state entertaining costs and accounting depreciation are disallowable for tax purposes.

In year ending 31 May 20X4, XYZ made an accounting profit of $480,000.

Profit included $16,300 of entertaining costs and $15,150 of income exempt from taxation.

XYZ has plant and machinery with accounting depreciation amounting to $24,200 and tax depreciation amounting to $45,200.

Calculate the tax charge for the year ended 31 May 20X4 assuming all profits are taxed at 25%.