🇳🇬 PATRIOT ODUNARO BABATUNDE JIMOH
27 TUTORIAL QUESTIONS on
SUN-acc 201-FINANCIAL ACCOUNTING 1
(CONTACT PATRIOT FOR SOLUTIONS ON 08038454008)
TOPIC 1: IASB FRAMEWORK FOR THE PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS.
1. Explain the objective of financial statements according to the IASB Conceptual Framework.
2. Differentiate
between relevance and faithful representation as qualitative
characteristics of financial information.
3. List and briefly explain the elements of financial statements as
defined in the IASB Framework.
4. (a) What is the difference between capital maintenance in financial terms and capital maintenance in physical terms? Provide examples
5. The following balances were extracted from Olowolagba Nigeria Limited as at 31 December 2025:
|
Item |
Amount (₦) |
|
Cash |
300,000 |
|
Inventory |
500,000 |
|
Accounts receivable |
200,000 |
|
Accounts payable |
150,000 |
|
Bank loan (long-term) |
400,000 |
|
Share capital |
450,000 |
|
Retained earnings |
200,000 |
Required:
(a) Prepare a statement of financial
position as per IAS 1.
(b) Identify the elements of financial
statements in the statement prepared.
TOPIC 2: INTRODUCTION TO IFRS 15 – REVENUE AND IAS 1.
6. Explain the main objective of IFRS 15 – Revenue from Contracts with Customers.
7. Differentiate
between revenue recognition over time
and revenue recognition at a point in
time under IFRS 15.
8. List and briefly explain the minimum
components of financial statements as required by IAS 1.
9. State three key qualitative
characteristics of financial information under IASB conceptual framework
and provide examples.
10. The following balances were extracted from Sogbae Nigeria Limited as at 31 December 2025:
|
Item |
Amount (₦) |
|
Cash |
250,000 |
|
Accounts Receivable |
150,000 |
|
Inventory |
400,000 |
|
Accounts Payable |
100,000 |
|
Bank Loan |
300,000 |
|
Share Capital |
300,000 |
|
Retained Earnings |
100,000 |
Required:
(a) Prepare a statement of financial
position as per IAS 1.
(b) Identify the elements of financial statements represented.
TOPIC 3 & 4: PRESENTATION OF FINANCIAL STATEMENTS AND ACCOUNTING FOR INVENTORIES (IAS 2).
11. Classify the following into Current or Non-current:
|
Item |
Amount |
|
Bank loan (repayable in 3 years) |
₦2,000,000 |
|
Trade payables |
₦850,000 |
|
Inventory |
₦600,000 |
|
Motor vehicles |
₦4,200,000 |
|
Prepaid rent (9 months) |
₦300,000 |
12. Explain the cost formulas allowed under IAS 2. Why is LIFO prohibited?
13. Define inventory and list three types of inventory recognized under IAS 2.
14. Explain the terms “going concern” and “accrual basis” and their significance in IAS 1.
15. State and explain five components of financial statements as required by IAS 1.
16. Explain four qualitative characteristics of financial statements.
17. Given the following information from Feyikogbon Nigeria Limited:
Cost of
inventory = ₦250,000
Selling price = ₦260,000
Selling expenses = ₦25,000
Cost of completion = ₦10,000
Required:
Determine value of inventory.
18. Given the following information about Ninalowo Nigeria Limited as at 31st December, 2024:
|
N |
|
|
Ordinary Share Capital |
20,000,000 |
|
Sales |
15,000,000 |
|
Cost of sales |
8,500,000 |
|
Administrative expenses |
1,200,000 |
|
Distribution expenses |
500,000 |
|
Finance cost |
300,000 |
|
Tax expense |
700,000 |
|
Trade Payables |
6,200,000 |
|
Trade Receivables |
1,500,000 |
|
Inventory |
2,500,000 |
|
Bank |
3,500,000 |
|
Cash |
500,000 |
|
Plant and Machinery |
15,000,000 |
|
Motor Van |
7,000,000 |
Requied:
a. Prepare a Statement of Profit or Loss for the year.
b. Prepare a Statement of Financial Position as at that date
TOPIC 5: INTRODUCTION TO IAS 8 – ACCOUNTING POLICIES, IAS 16 – PROPERTY, PLANT AND EQUIPMENT, IAS 20 – GOVERNMENT GRANTS AND IAS 23 – BORROWING COSTS.
19. Irekari Limited received a government grant of ₦200,000 to purchase machinery costing ₦1,000,000 on 1 January 2025. The machinery has a useful life of 5 years and no residual value.
Required:
(a) Calculate the annual depreciation
using the asset approach.
(b) Show the journal entry for grant
recognition.
20. Define government
grants according to IAS 20 and state two methods of presenting them in
financial statements.
21. (a) Explain the treatment of
borrowing costs under IAS 23.
22. State the criteria for a qualifying asset.
23. List and explain the recognition criteria for Property, Plant, and Equipment under IAS 16.
24. A machine was purchased on 1 January 2023 for ₦1,500,000. It has a residual value of ₦150,000 and a useful life of 5 years. On 1 January 2025, the useful life was revised to 4 years remaining.
Required:
(a) Calculate the annual depreciation
for 2023–2024.
(b) Calculate the revised annual
depreciation for 2025 onward.
25. Explain the objective of IAS 8 and differentiate between a change in accounting policy and a change in accounting estimate.
26. Itura construction company borrowed ₦500,000 on 1 January 2025 to finance a building under construction. Interest for the year amounted to ₦40,000. The building will be completed on 31 December 2025.
Required:
(a) Determine the amount to capitalize
as part of the building cost.
(b) Show the journal entry for
capitalization.
27. Ajimatanraeje Nigeria Limited discovered in 2025 that an expense of ₦50,000 related to 2024 was omitted in prior year financial statements.
Required:
(a) Explain how this prior period error
should be corrected according to IAS 8.
(b) Show the adjusting journal entry.
