Analyzing Financial Statements of Emirates Traders Ltd
Added on 2020-06-03
10 Pages1835 Words56 Views
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Prepare financial reports for acorporate entity
Table of ContentsINTRODUCTION ..........................................................................................................................1QUESTION 1...................................................................................................................................1Journal entries for purchase combination...............................................................................1Journal entries for settlement..................................................................................................2QUESTION 2...................................................................................................................................3Statement of taxable income..................................................................................................3Journal entries of tax expense and tax effect of temporary difference...................................3QUESTION 3...................................................................................................................................5Prepare cash flow from operating activities...........................................................................5QUESTION 4 ..................................................................................................................................6CONCLUSION ...............................................................................................................................7REFERENCES................................................................................................................................8
INTRODUCTION In the business unit, it is highly required for the manager to prepare accounts and presentreport about the same in a highly structured way. Moreover, reports furnish information aboutthe financial position and performance of firm. Consolidated financial statements may be definedas a framework that combines assets, liabilities, equity, income, expenses and cash flows ofparent and subsidiary company into one. In IAS 27, rules are mentioned in relation to thepreparation and presentation of consolidated accounts. In this, report will describe the manner inwhich consolidated statements can be prepared for presenting information more effectually. QUESTION 1Journal entries for purchase combinationTable 1: Journal entries for Purchase of businessParticularsDebitCreditNet assets acquired a/c Dr494000To purchase consideration494000Net assets acquired a/c Dr494000Goodwill a/c Dr6000To purchase consideration500000Inventory a/c Dr100000Accounts receivable a/c Dr200000Land a/c Dr300000Buildings a/c Dr170000Motor vehicle a/c Dr5000Goodwill a/c Dr6000To accounts payable181000To bank overdraft100000To purchase consideration500000Working notesW.N.1Table 2: Calculation of net asset acquiredParticularsBook ValueFair valueAssetsInventory145000100000Accounts receivable225000200000Land50000300000Building80000170000Motor vehicle400001
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