1 answer

7- By the end of the year CIMA entity had 100 units in warehouse of product...

Question:

7- By the end of the year CIMA entity had 100 units in warehouse of product X. Units are so far reported at total cost of $10

TASD ast vear Argos Company showed a negative cash flow from operating activities. What Ad U could be the reasons for this an

7- By the end of the year CIMA entity had 100 units in warehouse of product X. Units are so far reported at total cost of $10,000. The selling price of the product has fallen to $110 per unit and cost to sell each unit is $25 per unit. Compute the value at which inventory should be reported in the statement of financial position and explain the rule you used to support your answer. loo units loob
TASD ast vear Argos Company showed a negative cash flow from operating activities. What Ad U could be the reasons for this and should the business's management be concerned Assume that you have been invited to a meeting ABC's Company's board of directors to address some financial reporting questions which have emerged. During the meeting, Director NMA asks the following questions: Director NMA: “Each year we spend significant amounts on things like brand development, research and development (R&D) and advertising. How is this expenditure treated from a financial reporting perspective? Do you agree with this treatment - why or why not?” Write a BRIEF response to Director NMA. Fito (3-) Why would the market value of the firm usually be higher than the book value? Explain with examples What are the characteristics that should be available in a particular item to be treated as an asset in the statement of financial position?

Answers

7.

Particulars
No of Units                100
Total Cost ($)           10,000
Cost per unit                100
Selling Price (a)                110
Cost to Sell (b)                  25
Net Realisable Value = (a-b)                  85

As per IAS 2, Inventory should be recorded at Cost or Net Realisable Value, whichever is lower.

Value of Inventory = $85x100=             8,500

1. There can be several reasons for Negative Cash flow from Operating activities like

a. Delayed remittances received from debtors

b. Bulky payments made to Creditors

c.Losses incurred during the current year

The negative Cash flows from operating activities should not be a matter of concern in short term but in long term, management should generate positive cash flows from operating activities for the business to run smoothly.

2. Significant amounts spent on R&D, Brand Development and advertising should not be recognised as an intangible asset, even though the expenditure incurred may provide future economic benefits; it should charge all such costs to the income statement.

Expenditure on advertising and promotional activities should be expensed when incurred as per IAS 38.

3. Market Value of firm = Market Price of share x No of shares

Book Value of firm = Book value of share x No of shares

From the above equation, it can be clearly said that Market Value of firm shall be higher than book value of share when market price of share is greater than book value of share, i.e. the fair market value of assets are greater than the book value of the assets

4. The characteristic of an assets are

a.) Should be controlled by the entity

b.) Should result from prior events or transactions

c.) Should result in future economic benefits flowing into the entity

.

Similar Solved Questions

1 answer
List five specific structures commonly found in cells and describe each of their general functions (they...
List five specific structures commonly found in cells and describe each of their general functions (they don't have to be true organelles)....
1 answer
Prove\:\left(cos\left(?\right)\:+\:sin\left(?\right)\right)^2\:=\:1\:+\:sin\left(2?\right)
Prove\:\left(cos\left(?\right)\:+\:sin\left(?\right)\right)^2\:=\:1\:+\:sin\left(2?\right)...
1 answer
Water (70°F) is draining from a tank through a galvanized iron pipe. The pipe length is...
Water (70°F) is draining from a tank through a galvanized iron pipe. The pipe length is L - 12 ft, the tank depth isH = 8 ft, and the pipe is 1-in. NPS schedule 40 (ID 049 in.). The entrance to the pipe is sharp /H Pipe of dimne 12f ㄥ 2. We were unable to transcribe this image...
1 answer
What is the output of the following code? 3eimport java.util.LinkedList; 4 import java.util.Queue; 7 public class...
What is the output of the following code? 3eimport java.util.LinkedList; 4 import java.util.Queue; 7 public class Pop f 8 static Queue<Integer> myQueue= new LinkedList<>(); public static void main(Stringl args) tf 10e myQueue.offer(new Integer(8)); myQueue.offer(new Integer (16)); System...
1 answer
The final section of the work plan for a report is the​ _____. A. schedule and...
The final section of the work plan for a report is the​ _____. A. schedule and task assignments B. credentials of the report writers C. preliminary outline D. sources and methods of data collection...
1 answer
3) Antibodies can be membrane-bound or secreted, depending on whether a stretch of additional amino acids...
3) Antibodies can be membrane-bound or secreted, depending on whether a stretch of additional amino acids are present or not. What process do you think determines if these amino acids are present? postranslational covalent attachment of a membrane spanning domain to the antibody alternat...
1 answer
Kyle is single and has taxable income on his ordinary income of $35,000 before considering a...
Kyle is single and has taxable income on his ordinary income of $35,000 before considering a long-term capital gain of $4000. His long term capital gain will be taxes at what rate? Select one: O a. 10%. O b. 0%. c. Partly at 0% and partly at 15% O d. 15%. Patricia, whose AGI is $50,000, is divorced,...
1 answer
Find the interval of convergence of the series (А){0} (В)(-1, 2) (C)(- 2, 2) (D)(- 6,...
Find the interval of convergence of the series (А){0} (В)(-1, 2) (C)(- 2, 2) (D)(- 6, 4) Оооо...
1 answer
A computer user finds that his wireless router transmits data at a rate of 70 Mbps...
A computer user finds that his wireless router transmits data at a rate of 70 Mbps (megabits per second). Find the average time to transmit one bit of data, then compare that time with the time difference between the Wi-Fi signal's reaching the user's computer directly and the signal's b...
1 answer
PH) 3) Air at a temperature of 60 F and a relative humidity of 60% with...
PH) 3) Air at a temperature of 60 F and a relative humidity of 60% with a flow rate of 1000 # 3/min enters a warm-air furnace and humidifier unit. The air leaves the unit at a temperature of 120 F and a relative humidity of 12%. If the air flows through the unit at a pressure of 14.5 psia and if the...
2 answers
I need an all of the answer for this question. 4. In an experiment to study...
I need an all of the answer for this question. 4. In an experiment to study the effect of the amount of baking powder in a biscuit dough upon the rise heights of the biscuits, four levels of baking powder were tested and four replicate biscuits were made with each level in a random order. The result...
1 answer
4:37 PM 4:37 PM Question 4 (7 Marks Hce Compuny is manufacing pcial sge ostai peplar...
4:37 PM 4:37 PM Question 4 (7 Marks Hce Compuny is manufacing pcial sge ostai peplar podcts (Sall De, and ig is be e pdes ene te A dden hotage of the pla d the podetion process nens he company to redce outp Nw the tie ied on the plastic injection moldng machine is no longer the botneck in he product...
1 answer
Is it possible for us to greatly improve energy efficiency and shift to a variety of...
Is it possible for us to greatly improve energy efficiency and shift to a variety of renewable energy resources before we do even more serious harm to our own life-support system and to many of the world’s other species? Is it necessary? How could it be accomplished?...
1 answer
Note: if z = (z1, z2, z3), then the vectors x = (−z2, z1, 0) and...
Note: if z = (z1, z2, z3), then the vectors x = (−z2, z1, 0) and y = (−z3, 0, z1) are both orthogonal to z. Consider the plane P = H4 (1,−1,3) in R 3 . Find vectors w, x, y so that P = w + Span(x, y). Note: if z = (2,22,23), then the vectors x = (-22,21,0) and y = (-23,0,2) are bo...
1 answer
What is the slope of the line perpendicular to # y=-3x-7 #?
What is the slope of the line perpendicular to # y=-3x-7 #?...
1 answer
Wavy Inc. is a calendar-year corporation. Its financial statements for the years 2017 and 2016 contained...
Wavy Inc. is a calendar-year corporation. Its financial statements for the years 2017 and 2016 contained errors as follows: 2017 2016 Ending Inventory $9,000 overstated $18,000 overstated Depreciation Expense $6,000 understated $13,500 overstated Assume that the proper co...
1 answer
Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for...
Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May of the current year. The company expected to operate the department at 100% of normal capacity of 8,400 hours. Variable costs: Indirect factory wages...
1 answer
1002 1002 R + R3 100 2 R2 20 V 5 V Given the circuit in...
1002 1002 R + R3 100 2 R2 20 V 5 V Given the circuit in Figure above, Calculate the total current through R2, using the superposition method 83 mA 133 mA 0 67 mA 16 mA...
1 answer
Sheffield Company purchases equipment on January 1, Year 1, at a cost of $570,000. The asset...
Sheffield Company purchases equipment on January 1, Year 1, at a cost of $570,000. The asset is expected to have a service life of 12 years and a salvage value of $51.300. Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (Round answers to ...