Chapter 3: Q2ISTQ (page 150)
Information in a company’s first IFRS statements must:
(a) have a cost that does not exceed the benefits.
(b) be transparent.
(c) provide a suitable starting point.
(d) All the above.
The correct option is “d”.
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Becker Ltd. is planning to adopt IFRS and prepare its first IFRS financial statements at December 31, 2018. What is the date of Becker’s opening balance sheet, assuming one year of comparative information? What periods will be covered in Becker’s first IFRS financial statements?
Selected accounts of Urdu Company are shown below.
| Supplies | |||
Beg. Bal | 800 | 10 ⁄ 31 | 470 |
| Salaries and Wages Expense | |||
10 ⁄ 15 | 800 | ||
10 ⁄ 31 | 600 | ||
| Unearned Service Revenue | |||
10 ⁄ 31 | 400 | 10 ⁄ 20 | 650 |
| Service Revenue | |||
10 ⁄ 17 | 2,400 | ||
10 ⁄ 31 | 1,650 | ||
10 ⁄ 31 | 400 | ||
| Accounts Receivable | |||
10 ⁄ 17 | 2,400 | ||
10 ⁄ 31 | 1,650 | ||
| Salaries and Wages Payable | |||
10 ⁄ 31 | 600 | ||
| Supplies Expense | |||
10 ⁄ 31 | 470 | ||
Instructions
From an analysis of the T-accounts, reconstruct
(a) the October transaction entries, and
(b) the adjusting journal entries that were made on October 31, 2017. Prepare explanations for each journal entry
E3-7 (L03) (Analyze Adjusted Data) A partial adjusted trial balance of Piper Company at January 31, 2017, shows the following.
ADJUSTED TRIAL BALANCEJANUARY 31, 2017
Debit (\() Credit(\))Supplies \( 700Prepaid Insurance 2,400Salaries and Wages Payable \) 800UnearnedService Revenue 750Supplies Expense 950Insurance Expense 400Salaries and Wages Expense 1,800Service Revenue 2,000
InstructionsAnswer the following questions, assuming the year begins January 1.(a) If the amount in Supplies Expense is the January 31 adjusting entry, and \(850 of supplies was purchased in January,what was the balance in Supplies on January 1?(b) If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for oneyear, what was the total premium and when was the policy purchased?(c) If \)2,500 of salaries was paid in January, what was the balance in Salaries and Wages Payable at December 31, 2016?(d) If $1,600 was received in January for services performed in January, what was the balance in Unearned Service Revenueat December 31, 2016?
Indicate whether each of the following items is a real or nominal account and whether it appears in the balance sheet or the income statement.
(a) Prepaid Rent.
(b) Salaries and Wages Payable.
(c) Inventory.
(d) Accumulated Depreciation—Equipment.
(e) Equipment.
(f) Service Revenue.
(g) Salaries and Wages Expense.
(h) Supplies.
Give an example of a transaction that result in:
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