Accounting and Financial Reporting Homework: Superstore Ltd

This document presents a complete solution to an accounting and financial reporting assignment, addressing five key questions related to financial statement disclosures, warranty provisions, after-reporting date events, and impairment losses. The solution includes detailed journal entries, working notes, and calculations to support the answers. Question 1 focuses on financial statement disclosures, including the adjustment of warranty provisions and the treatment of after-reporting date events. Question 2 provides working notes and calculations. Question 3 involves the preparation of financial statements. Question 4 covers the detection and correction of errors. Finally, Question 5 addresses the measurement of assets at fair values, the allocation of impairment losses, and the reversal of impairment losses in accordance with AASB standards. The assignment provides a practical application of accounting principles and financial reporting standards. This assignment is contributed by a student to be published on the website Desklib. Desklib is a platform which provides all the necessary AI based study tools for students.

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

1ACCOUNTING AND FINANCIAL REPORTING
Table of Contents
Answer to Question 1:.....................................................................................................................2
Answer to Question 2:.....................................................................................................................7
Answer to Question 3:.....................................................................................................................9
Part i:............................................................................................................................................9
Part ii:.........................................................................................................................................10
Answer to Question 4:...................................................................................................................11
Answer to Question 5:...................................................................................................................13
References:....................................................................................................................................17

2ACCOUNTING AND FINANCIAL REPORTING
Answer to Question 1:
Serial Number Situation Accounting
Treatment
Financial
Statements to
be adjusted
Note disclosure/Journal
entry
1 Accounting
estimate change
It is evident
from the
“Paragraph 36 of
AASB 108” that
modification in
accounting
projection has to
be realised in the
profit and loss
statement from
the change date
(Aasb.gov.au,
2019).
Financial reports
of the year 2017-
2018 as well as
other future
financials
Dr. Warranty Expense
$15,000
Cr. Provision for Warranty
$15,400
(Warranty expense record)
2 After reporting
period events-
File of
bankruptcy after
the date of
AASB 110
clearly states
that events are of
two types, which
include adjusting
Financial reports
of the year 2017-
2018
Dr Bad Debt Expense
$380,000
Cr. Allowance for Bad Debt
$380,000

3ACCOUNTING AND FINANCIAL REPORTING
reporting as well
as non-
recoverability of
receivables
as well as non-
adjusting events
(Aasb.gov.au,
2019). Adjusting
events could be
classified as
those events,
where there is
evidence of
happening
present on the
date of
reporting. The
current case is
observed to have
association with
adjusting event,
which mandates
the requirement
for recording the
same (Flower,
2018).
(Recording allowance for
bad debt)
3 After reporting AASB 110 No need for any In compliance with

4ACCOUNTING AND FINANCIAL REPORTING
date events-
Change in the
rate of tax
clearly states
that events are of
two types, which
include adjusting
as well as non-
adjusting events.
Adjusting events
could be
classified as
those events,
where there is
evidence of
happening
present on the
date of
reporting. The
current case is
observed to have
association with
non-adjusting
event, since
evidence could
not be gathered
adjustment “Paragraph 21 of AASB
110”, the below-stated
disclosure with respect to
the event’s nature and
financial influence is
needed:
“The tax rate change from
30% to 28% on the part of
the government after the
date of reporting leading to
fall in the amount of current
tax from ……… to …….”

5ACCOUNTING AND FINANCIAL REPORTING
about the tax
rate modification
on the date of
reporting
4 Detection of
errors in the last
year
adjustments-
Wrong recording
of repairs
expense under
assets and charge
of depreciation
on the same
It is clearly
mentioned in
“Paragraph 42 of
AASB 108” that
material errors
have to be
corrected by an
organisation that
took place in the
last period to the
initial financial
statement set
allowed for
publishing after
their
identification by
either restating
the comparative
values for the
Financial reports
of the year 2017-
2018 along with
the comparative
figures depicted
in the financial
reports of the
years 2016-2017
and 2017-2018
Dr. Retained Earnings
$21,000
Dr. Accumulated
Depreciation $1,000
Cr. Asset $22,000
(Correction of error
occurred in the past year)
Dr. Income Tax Receivable
$6,300
Cr. Retained Earnings
$6,300
(Recording of tax reversal)

6ACCOUNTING AND FINANCIAL REPORTING
last year or if the
error happened
before the
sooner presented
period through
restatement of
opening asset,
equity and
liabilities for the
sooner last
period presented
(Aasb.gov.au,
2019). The
provided case
meets the above
criteria requiring
immediate
correction.
Working Note:
Calculation of warranty expense
Sales for the year $430,000
Provision to be made @ 8% $34,400

7ACCOUNTING AND FINANCIAL REPORTING
Less: Provision already made ($19,000)
Provision to be created in the current year $15,400
Answer to Question 2:
Working Note 1:

8ACCOUNTING AND FINANCIAL REPORTING
Answer to Question 3:
Part i:

9ACCOUNTING AND FINANCIAL REPORTING
Part ii:

10ACCOUNTING AND FINANCIAL REPORTING
Answer to Question 4:
Working Note 1:

11ACCOUNTING AND FINANCIAL REPORTING