FINANCIAL ACCOUNTING.

Running head: FINANCIAL ACCOUNTING
Financial Accounting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

1FINANCIAL ACCOUNTING
Table of Contents
Answer to Question 1:.....................................................................................................................2
Answer to Question 2:.....................................................................................................................4
Answer to Question 3:.....................................................................................................................6
Part (i):.........................................................................................................................................6
Part (ii):........................................................................................................................................7
Answer to Question 4:.....................................................................................................................8
Answer to Question 5:...................................................................................................................10
References:....................................................................................................................................13

2FINANCIAL ACCOUNTING
Answer to Question 1:
Case Situation Treatment Adjustment Journal entry/note
disclosure
1 Accounting
estimate
modification
Recognition in
income statement
at the same date,
in accordance
with “Paragraph
36 of AASB
108”
(Aasb.gov.au,
2019)
2017 financial
statements and
future reports
Warranty expense Dr
$15,400
Provision for Warranty
Cr $15,400
{$430,000 + (430,000 *
8%) - $19,000]
(Warranty expense
recorded)
2 Event after the
reporting period
Adjusting event
under AASB 110
(Aasb.gov.au,
2019)
2017 financial
statements
Bad Debt Expense Dr
$380,000
Provision for Bad Debt
$380,000
(Bad debt allowance
recorded)
3 Event after
reporting period
Non-adjusting
event according
to AASB 110
Adjustment not
required
Note disclosure about the
influence of tax rate
alteration on current tax

3FINANCIAL ACCOUNTING
(Aasb.gov.au,
2019)
amount
4 Error
identification of
the previous
period
Correction of
material errors,
as per
“Paragraph 42
of AASB 108”
(Aasb.gov.au,
2019)
2016, 2017 and
2018 financial
statements
Retained Earnings Dr
$21,000
Accumulated
Depreciation Dr $1,000
Asset Cr $22,000
(Correction of error)
Income Tax Receivable
Dr $6,300
Retained Earnings Cr
$6,300
(Tax reversal recorded)