Case Analysis of Financial Reporting

Running head: FINANCIAL REPORTING
Financial Reporting
Name of the Student:
Name of the University:
Authors Note:

1
FINANCIAL REPORTING
Table of Contents
a)......................................................................................................................................................2
b)......................................................................................................................................................3
c)......................................................................................................................................................4
Reference.........................................................................................................................................6

2
FINANCIAL REPORTING
a)
In the books of San Pedro Industries
Balance sheet (using account format)
Liabilities and Equities Amount Amount Assets
Amoun
t Amount
Current Liability Current Assets
Accounts Payable $710.00 Cash in hand $88.00
Income Tax Payable $105.00
Accounts
Receivable
$895.0
0
Dividends Payable $50.00
Provision for
doubtful debt -$95.00
Net Accounts
Receivable $800.00
Total Current
Liabilities $865.00
Interest
Receivable $60.00
Installment
receivables $120.00
Non-Current Liability
Merchandise
Inventory $100.00
Notes Payable $1,000.00 Supplies $28.00
Unearned revenue $125.00 Prepaid expenses $46.00
Total Current
Assets $1,242.00
Total Noncurrent
Liability $1,125.00
Non-Current
Assets
Note Receivable $475.00
Total Liability $1,990.00
Building and
Equipment
$1,425.
00
Accumulated
depreciation
-
$375.0
0
Shareholders’ Equity
Net Building and
Equipment $1,050.00
Common stock at par $90.00 Land $600.00
Additional capital $725.00 Patent $85.00
Retained earning $647.00
Total Non-
Current Assets $2,210.00
Total Shareholders’
Equity $1,462.00
Total Liability and
Shareholders’ Equity $3,452.00 Total Assets $3,452.00

3
FINANCIAL REPORTING
b)
In the books of San Pedro Industries
Balance sheet (Report format)
Particulars Amount Amount
Current Assets
Cash in hand $88.00
Accounts Receivable $895.00 $0.00
Provision for doubtful debt -$95.00 $0.00
Net Accounts Receivable $800.00
Interest Receivable $60.00
Installment receivables $120.00
Merchandise Inventory $100.00
Supplies $28.00
Prepaid expenses $46.00
Total Current Assets $1,242.00
Non-Current Assets
Note Receivable $475.00
Building and Equipment $1,425.00
Accumulated depreciation -$375.00
Net Building and Equipment $1,050.00
Land $600.00
Patent $85.00
Total Non-Current Assets $2,210.00
Total Assets $3,452.00
Current Liability
Accounts Payable $710.00
Income Tax Payable $105.00
Dividends Payable $50.00
Total Current Liabilities $865.00
Non-Current Liability
Notes Payable $1,000.00
Unearned revenue $125.00
Total Noncurrent Liability $1,125.00
Total Liability $1,990.00

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FINANCIAL REPORTING
Shareholders’ Equity
Common stock at par $90.00
Additional capital $725.00
Retained earning $647.00
Total Shareholders’ Equity $1,462.00
Total Liability and shareholder’s Equity $3,452.00
c)
In the books of San pedro Industries
Balance sheet (IFRS format)
Particulars IFRS Standard Amount Amount
Non-Current Assets
Patent AIS 38 $85.00
Land $600.00
Building and Equipment IAS 16 $1,425.00
Accumulated depreciation -$375.00
Net Building and Equipment $1,050.00
Note Receivable $475.00
Total Non-Current Assets $2,210.00
Current Assets
Cash in hand $88.00
Accounts Receivable $895.00
Provision for doubtful debt IAS 8 -$95.00
Net Accounts Receivable $800.00
Interest Receivable $60.00
Installment receivables $120.00
Merchandise Inventory IAS 2 $100.00
Supplies $28.00
Prepaid expenses $46.00
Total Current Assets $1,242.00
Current Liability
Accounts Payable $710.00
Income Tax Payable $105.00
Dividends Payable $50.00

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FINANCIAL REPORTING
Total Current Liabilities $865.00
Non-Current Liability
Notes Payable $1,000.00
Unearned revenue $125.00
Total Noncurrent Liability $1,125.00
Total Liability $1,990.00
Shareholders’ Equity
Common stock at par $90.00
Additional capital $725.00
Retained earning $647.00
Total Shareholders’ Equity $1,462.00
Total Liability and shareholder’s Equity $3,452.00
The financial report is presented as per the requirement of the IAS 1. In case where there
are any specific standards that are mentioned in the balance sheet above.
The AASB 112 Accounting for Income taxes states that there is a need to recognize the
consequences of both the current and future tax on the transactions of the current year.
Therefore, there is a need to perform two separate calculations and pass two journal entries for
current tax liability and the movement in the balance of the deferred tax.
The journal entry for current tax liability:
Income tax expenses Account…...Debit $105
To Current Tax Liability Account $105

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FINANCIAL REPORTING
Reference
Dudin, M.N., Prokofev, M.N., Fedorova, I.J.E., Frygin, A.V. and Kucuri, G.N., 2015.
International Practice of Generation of the National Budget Income on the Basis of the Generally
Accepted Financial Reporting Standards (IFRS).
Gassen, J., 2017. The effect of IFRS for SMEs on the financial reporting environment of private
firms: an exploratory interview study. Accounting and Business Research, 47(5), pp.540-563.
KAAYA, I.D., 2015. The Impact of International Financial Reporting Standards (IFRS) on
Earnings Management: A Review of Empirical Evidence. Journal of Finance, 3(3), pp.57-65.
Nobes, C., 2014. International Classification of Financial Reporting 3e. Routledge.