Answered: MN ltd's draft statement of financial…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

MN ltd's draft statement of financial position as at 31 March 2015 shows financial assets at fair value through profit or loss with a carrying amount of GHS12.5m as at 1 April 2014. These financial assets are held in a fund whose value changes directly in proportion to a specified market index. At 1 April 2014 the relevant index was 1,200 and at 31 March 2015 it was 1,296. What amount of gain or loss should be recognised at 31 March 2015 in respect of these assets?

A. GHS1,000,000 gain
B. GHS96,000 gain
C. GHS1,000,000 loss
D. GHS96,000 loss

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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