F1 Exam Dumps : Financial Reporting

EF is a large manufacturing entity with several of its manufacturing sites in different locations. Currently all of the sites have a local procurement department. EF's board are looking to implement a centralized purchasing system.

Match the tokens according to whether you believe each statement is either an advantage or disadvantage of implementing a centralized purchasing system for EF.

In which of the following concepts is profit an increase in the nominal value of capital over a period?

An entity opens a new factory and receives a government grant of $25,000 towards the cost of new plant and equipment. This new plant and equipment originally costs $100,000.

The entity uses the net cost method allowed by IAS 20 Accounting for Government Grants and Disclosure of Government Assistance to record government grants of this nature. All plant and equipment is depreciated at 20% a year on a straight line basis.

Calculate the amount of depreciation to be included for this plant and equipment in the statement of profit of loss for the factory's first year of operation.

Give your answer to the nearest whole $.