The difference between US GAAP and IFRS

  Q1: Balance Sheet The following is a December 31, 2020, post-closing trial balance for the Alexandria Exploration Corporation. Account Title Debits Credits Cash 52,000 Accounts receivable 223,000 Allowance for uncollectible accounts 15,000 Inventories 200,000 Supplies 3,000 Investments 140,000 Land 100,000 Buildings 500,000 Accumulated depreciation - buildings 150,000 Machinery 250,000 Accumulated depreciation - machinery 80,000 Goodwill 36,000 Accounts payable 125,000 Bonds payable 500,000 Interest payable 40,000 Common stock 500,000 Retained earnings 94,000 Totals 1,504,000 1,504,000 Additional information: 1. Accounts receivable includes a $50,000 note receivable received from a customer that is due in 2022. Also included is interest on the note of $3,000 that is due in six months. 2. The land account includes land that cost $20,000 that the company has not used and is currently listed for sale. 3. The investment account includes a $10,000, 3-month certificate of deposit due in 40 days. The remaining investments will be sold within the next year. 4. The bonds payable account consists of the following: a. a $200,000 issue due in six months. b. a $300,000 issue due in six years. 5. The common stock account represents 500,000 shares of no par value common stock issued and outstanding. The corporation has 1,000,000 shares authorized. Required: Prepare a classified balance sheet for Alexandria at December 31, 2020. Q2: Ratio Analysis The year 2020 balance sheet for the Tomassini Corporation is shown below. Tomassini Corporation Balance Sheet December 31, 2020 Assets: ($ in 000s) Cash $ 150 Accounts receivable 400 Inventories 500 Property, plant, and equipment (net) 1,200 Total assets $2,250 Liabilities and Shareholders’ Equity: Current liabilities $ 600 Long-term liabilities 500 Paid-in capital 1,000 Retained earnings 150 Total liabilities and shareholders' equity $2,250 The company's 2020 income statement reported the following amounts ($ in thousands): Net sales $6,600 Interest expense 30 Income tax expense 200 Net income 260 Required: Determine the following ratios for 2020: a. current ratio b. acid-test ratio c. debt to equity ratio d. times interest earned ratio Sol: a) Current ratio = Current assets/ Current Liabilities = (150+400+500)/600 = 1.75 times b) Acid-test ratio = (Current Assets-Inventory)/ Current Liabilities = (150+400)/600 = 0.917 times c) Debt to Equity Ratio = Total Liabilities/Total Equity = (600+500)/ (1000+150) = 0.9565 or 95.65% d) Times Interest expense ratio = EBIT/Interest Expense = (260+200+30)/30 = 16.33 times Q3: Statement of cashflows Presented below are the 2020 income statement and comparative balance sheet information for Siegfried & Royce (S&G). Siegfried & Royce Income Statement For the Year Ended December 31, 2020 ($ in thousands) Sales revenue $12,500 Operating expenses: Cost of goods sold $7,300 Depreciation 400 Rent 250 Administrative and other 2,200 Total operating expenses 10,150 Income before income taxes 2,350 Income tax expense 940 Net income $ 1,410 Balance Sheet information ($ in thousands) Dec. 31, 2020 Dec. 31, 2019 Assets: Cash $3,280 $1,300 Accounts receivable 1,250 980 Inventory 980 900 Prepaid rent 150 100 Plant & equipment 3,000 2,600 Less: Accumulated depreciation (1,200) (800) Total assets $7,460 $5,080 Liabilities and shareholders’ equity: Accounts payable $ 500 $ 580 Payables for administrative and other expenses 650 700 Income taxes payable 450 350 Note payable (due 12/31/2017) 2,500 2,000 Common stock 1,500 1,000 Retained earnings 1,860 450 Total liabilities and shareholders’ equity $7,460 $5,080 Required: 1. Prepare S&G’s 2020 statement of cash flows, using the indirect method to present cash flows from operating activities. 2. Prepare the cash flows from operating activities section of S&G’s 2020 statement of cash flows using the direct method. Assume that all purchases and sales of inventory are on account, and that there are no anticipated bad debts for accounts receivable. Q4: International Financial Reporting Standards Discuss the reporting standards by distinguishing the difference between US GAAP and IFRS. Your discussion should include the reporting of comprehensive income statement and statement of cashflow. Marks will be based on critical evaluation of the matter.