Budgeted Income Statement : It is a financial report in which we record estimated earnings and expenses of business. It is prepared after operating budget. It consists of items of revenues, expense nature and net result of that period. It contains same items like of actual income statement. Budgeted Balance Sheet : It is a financial report which estimates the amount of assets, liabilities and equity. It is similar to normal balance sheet; the only difference is the budgeted balance sheet is based on projections. To identify: Whether the item is of budgeted income statement or of budgeted balance sheet.

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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.

Chapter 20, Problem 25QS

To determine

Budgeted Income Statement:

It is a financial report in which we record estimated earnings and expenses of business. It is prepared after operating budget. It consists of items of revenues, expense nature and net result of that period. It contains same items like of actual income statement.

Budgeted Balance Sheet:

It is a financial report which estimates the amount of assets, liabilities and equity. It is similar to normal balance sheet; the only difference is the budgeted balance sheet is based on projections.

To identify: Whether the item is of budgeted income statement or of budgeted balance sheet.

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If an oil rig was built in the sea, the cost to be capitalised is likely to include the cost of constructing the asset and the present value of the cost of dismantling it. If the asset cost $10 million to construct, and would cost $4 million to remove in 20 years, then the present value of this dismantling cost must be calculated. If interest rates were 5%, the present value of the dismantling costs are calculated as follows: $4 million x 1/1.0520 = $1,507,558 The total to be capitalised would be $10 million + $1,507,558 = $11,507,558. This would be depreciated over 20 years, so 11,507,558 x 1/20 = $575,378 per year. Each year, the liability would be increased by the interest rate of 5%. In year 1 this would mean the liability increases by $75,378 (making the year end liability $1,582,936). This increase is taken to the finance costs in the statement of profit or loss.

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Answer 2

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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.

Chapter 20, Problem 25QS

To determine

Budgeted Income Statement:

It is a financial report in which we record estimated earnings and expenses of business. It is prepared after operating budget. It consists of items of revenues, expense nature and net result of that period. It contains same items like of actual income statement.

Budgeted Balance Sheet:

It is a financial report which estimates the amount of assets, liabilities and equity. It is similar to normal balance sheet; the only difference is the budgeted balance sheet is based on projections.

To identify: Whether the item is of budgeted income statement or of budgeted balance sheet.

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Answer 3

Question

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.

Chapter 20, Problem 25QS

To determine

Budgeted Income Statement:

It is a financial report in which we record estimated earnings and expenses of business. It is prepared after operating budget. It consists of items of revenues, expense nature and net result of that period. It contains same items like of actual income statement.

Budgeted Balance Sheet:

It is a financial report which estimates the amount of assets, liabilities and equity. It is similar to normal balance sheet; the only difference is the budgeted balance sheet is based on projections.

To identify: Whether the item is of budgeted income statement or of budgeted balance sheet.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

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.

Chapter 20, Problem 25QS

To determine