Requirement 1:

IFRS refers to “international financial reporting standards.” IFRS are the accounting policies and
standards that the organizations all around the globe have to follow. It helps to bring consistency among
the accounting practices all over the world. It helps the companies to be consistent in preparing their
financial statements. IFRS provides the rules for the following types of financial statements:

1. Income statement
2. Balance sheet
3. Statement of changes in equity
4. Statement of cash flow
5. Notes to the accounts

Requirement 2:
Income statement:

Particulars $ $

Sales: 25000

Less: Cost of sales

Opening inventory 2000

Purchases 8000

Closing inventory (3000) (7000)

Gross profit 18000

Less: expenses

Salary 3000

Advertising 4000

General 4000

Interest 2000 (13000)

5000

Add: investment income 5000

Net profit 10000

Balance sheet:

Particulars $ $

Non-current Assets

Machine 4000

Less: accumulated depreciation (1000) 3000

Car 6000

Total non-current assets 9000

Current assets

Closing inventory 3000

Insurance prepaid 3000

Accounts receivable 5000

Cash 4000 15000

Total Assets 24000

Non-current liabilities 3000

Current liabilities

Accounts payable 3000

Unearned service revenue 5000 8000

Total liabilities 11000

Share capital 4000

Less: Drawings (1000)

Add: net profit 10000 13000

Total liabilities and capital 24000

Requirement 3:

No Account Debit Credit

1. Cash 21000
Accounts receivable 4000
To capital 23000
To accounts payable 2000
2 Electricity expense 200
Electricity bill payable 200

3 Purchases 5000
To Accounts payable 5000

4 Accounts receivable 6000

To Sales 6000

5 Cash 3000
To machinery 3000

6 Drawing 1000
To cash 1000

7 Accounts receivable 800

To service provided 800

8 Accounts payable 3000

To cash 3000

9 Cash 2000
To Accounts receivable 2000
Requirement 4:

No. Account Debit Credit

1. Supply expense 300
To supplies 300

2 Insurance expense 600

To prepared insurance 600

3 Depreciation 1000
To accumulated depreciation 1000

4 Accounts receivable 2000

To service revenue 2000

5 Unearned service revenue 350

To service revenue 350

6 Bad debts 500

To Accounts receivable 500

7 Salary expense 700

To salary payable 700

8 Interest expense 400

To interest payable 400

References:
 Ball, R., 2006. International Financial Reporting Standards (IFRS): pros and cons for investors.
Accounting and business research, 36(sup1), pp.5-27.
 Brown, P., 2011. International Financial Reporting Standards: what are the benefits?. Accounting
and business research, 41(3), pp.269-285.
 Epstein, B.J. and Jermakowicz, E.K., 2010. WILEY Interpretation and Application of International
Financial Reporting Standards 2010. John Wiley & Sons.