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International Financial Reporting - Able Plc

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Added on  2020-07-22

International Financial Reporting - Able Plc

   Added on 2020-07-22

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InternationalFinancial Reporting
International Financial Reporting - Able Plc_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Question 1........................................................................................................................................1Preparation of income statement for Able Plc........................................................................1Question 2........................................................................................................................................4Critical evaluation of the statement of financial reporting ....................................................4Question 3........................................................................................................................................7Critical evaluation of the statement based on IAS 2..............................................................7CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
International Financial Reporting - Able Plc_2
INTRODUCTIONInternational financial reporting standards are required to be followed in order to producefair financial statements. Present report deals with the preparation of income statement of AblePlc. for the particular year. Moreover, IAS standards such as IAS 2 related to inventories isexplained by carrying out analysis of the cost of same. Furthermore, IAS 38 related to intangibleassets are also accounted for in effective way. Thus, these standards are required for preparingcorrect financials of organisation. QUESTION 1Preparation of income statement for Able Plc.Income statement for the yearended 31 December 2017ParticularsAmountRevenue195000Less: COGS122000Gross profit73000Operating expensesRent and Rates2000Salaries Outstanding1000Bad Debts1000Motor expenses 6000Warehouse Salaries25000Hire of vehicles2000Finance costs3000Loss on closed branch20000Depreciation on Non-current assetsFixtures @ 10%2000Motor Vans @ 10%10001
International Financial Reporting - Able Plc_3
Directors Salary10000Insurance1000Total operating expenses74000Operating incomeEBT (Loss)-1000Add: Depreciation3000Tax paid3000Net Loss-1000Workings1. Workings for COGS (Cost of GoodsSold)Beginning inventory20000Purchases130000Ending inventory26000124000Less: Return outwards1000123000Less: Carriage Inwards1000COGS1220002. Workings for revenueSales2050002
International Financial Reporting - Able Plc_4

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