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1. If a machinery is purchases for business entity and sales tax is paid on it and the entity is registered for sales tax .Does input for that sales tax will be given ( the cost of machinery will be by excluding the sales tax).
2. If dividend is declared before the period end(does this period means accounting period or reporting period) . where will be it disclosed under statement of financial position or statement of equity change
3. At 31 December 20X2 the following matters require inclusion in a company’s financial statements:
(1) On 1 January 20X2 the company made a loan of $12,000 to an employee, repayable on
30 April 20X3, charging interest at 2 per cent per year. On the due date she repaid the loan and
paid the whole of the interest due on the loan to that date.(2 )The company has paid insurance $9,000 in 20X2, covering the year ending 31 August 20X3.
(3) In January 20X3 the company received rent from a tenant $4,000 covering the six months to
31 December 20X2.For these items, what total figures should be included in the company’s statement of financial position at
31 December 20X2?Receivables and prepayments
Payabless and accruals$. $
A 22,000. 240
B 22,240. NIL
C 10,240. NIL
D 16,240 6,000
This is bpp book question I want to ask why they have included loan amount in receivables . Loan given is a non current asset as it will be matured after 1 year period
2. If dividend is declared before the period end(does this period means accounting period or reporting period) . where will be it disclosed under statement of financial position or statement of equity change
Answer: if they’re only declared (not paid), then only in Disclosures
If paid, then you will see it in the Statement of Cash flow, in SOCI, in Disclosures and obviously you will have effect on the Statement of Financial Position (since total of SOCI should be equal to “Equity” line in the statement of financial position)1. The amount net of sales tax is debited to the machine account (as the cost of the machine) and the sales tax is debited to the sales tax account (and therefore reduces the sales tax payable to the state). I do explain this in my free lectures on sales tax.
3. The loan was made (i.e. given) to the employee, which means that the employee is owing money to the company. Therefore it is a receivable. It is a current asset because as at the year end of 31 December X2 the employee will be repaying the money in 4 months time (30 April X3).
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