MILD LIMITED
You are given the following statement of comprehensive income for the year ended 31 December 2017, drafted before adjusting for the effects of the change in estimates described in the additional information.
MILD LIMITED
DRAFT STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2017
|
| 2017 | 2016 |
| Profit before taxation | 500 000 | 650 000 |
| Income tax expense | (180 000) | (300 000) |
| Profit for the year | 320 000 | 350 000 |
| Other comprehensive income | 0 | 0 |
| Total comprehensive income | 320 000 | 350 000 |
Mild limited owns vehicles (its only item of property, plant and equipment) the original details of which are shown below
Cost N$ 600 000
Purchase date 01/01/2014
Estimated useful life (estimated on date of purchase) 8 Years
Depreciation to nil residual value Straight- line
On 1 January 2017, the total useful life was revised to six years. The company uses the re-allocation method to account for changes in estimates. The statement of comprehensive income had been drafted after accounting for depreciation based on the previous estimate. The corporation tax rate is 30%
Required
- Prepare the necessary journal entries assuming that depreciation had already been processed in the 2017 accounting records based on the old estimate (2)
- Prepare the notes to the financial statements of Mild Limited for the year ended 31 December 2017 in accordance with international financial reporting standards ( include both the statement of compliance and the property, plant and equipment accounting policy note) (5)
- Prepare the statement of comprehensive income of Mild Limited for the year ended 31 December 2017 in accordance with International financial reporting standards (3)
- Disclose property, plant and equipment in the statement of financial position of Mild Limited as at 31 December, 2017 in accordance with international financial reporting standards (2)
