13. Smithson Co purchased a new building with a 50‐year life for $10 million on 1 January 20X3. On 30 June 20X5, Smithson Co moved out of the building and rented it out to third parties on a short‐term lease. Smithson Co uses the fair value model for investment properties. At 30 June 20X5 the fair value of the property was $11 million and at 31 December 20X5 it was $11.5 million. What is the total net amount to be recorded in the statement of profit or loss in respect of the office for the year ended 31 December 20X5? A Net income $400,000 B Net income $500,000 C Net income $1,900,000 D Net income $2,000,000 14. On 1 October 20X3, Hoy had $2.5 million of equity shares of 50 cents each in issue. No new shares were issued during the year ended 30 September 20X4, but on that date there were outstanding share options to purchase 2 million equity shares at $1.20 each. The average market value of Hoy’s equity shares during the year was $3 per share. Hoy’s profit after tax for the year ended 30 September 20X4 was $1,550,000. What is Hoy’s diluted earnings per share for the year ended 30 September 20X4? A 25.0¢ B 31.0¢ C 26.7¢ D 22.1¢

An entity purchased property for $6 million on 1 July 20X3. The land element of the purchase was $1 million. The expected life of the building was 50 years and its residual value nil. On 30 June 20X5 the property was revalued to $7 million, of which the land element was $1.24 million and the buildings $5.76 million. On 30 June 20X7, the property was sold for $6.8 million. What is the gain on disposal of the property that would be reported in the statement of profit or loss for the year to 30 June 20X7? A Gain $40,000 B Loss $200,000 C Gain $1,000,000 D Gain $1,240,000

ABC Co. leased equipment from XYZ Co. on July 1, Year 1, in a finance lease. The present value of the lease payments discounted at 10% was $53,553. Seven annual lease payments of $10,000 are due each year beginning July 1, Year 1. XYZ Co. had built the equipment recently for $52,000, and its retail fair value was $53,553. What amount of interest income from the lease should XYZ Co. recognize in its income statement on December 31, Year 1?

Brewery Ltd made net sales of $39 700 and its gross profit was $29 100 for the same period. If the opening stock was $15 860 and net purchases $18 615, what was the value of closing stock

Identify the different names given to the income statement.Define each of the following terms and, where relevant, write down the mathematical equation that would help in calculating the figure.SalesCost of goods soldGross profitNet profitCalculate the cost of goods sold (COGS), given the following information:  $Sales 700 000Stock (opening) 100 000Purchases of stock 400 000Closing stock 50 000Using the figures from question 3, calculate gross profit.Using your workings from questions 3 and 4, calculate the value of net profit (or loss) if expenses for the period totalled $80 000.Anita Toparis owns and operates Petal’s Florist. Last year Anita had a sales revenue of $285 000. Her cost of goods sold totalled $115 000. Her operating expenses were: electricity $5000, advertising $11 000, interest charges $5000, salaries $62 000 and rent $25 000. Construct an income statement (statement of financial performance) for Anita and tell her whether she has made a net profit.Distinguish between selling, administrative and financial expenses, giving examples for each.Explain how an income statement can provide useful information to a business and its stakeholders.

Jack and Ted formed an equal partnership. Jack contributed $10,000 cash and Ted contributed depreciable equipment that he has owned for 6 months with a fair market value of $10,000 and an adjusted basis of $2,000. What amount should Ted report as a gain as a result of this transaction?a.$8,000b.$4,000c.$0d.$5,000