During 2009 Bhuvan Ltd discovered that goods sold in 2008 were incorrectly included in inventory as at 31 03 2008 at Rs162...
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Case study 5 ias 8

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IAS 8 ACCOUNTING ESTIMATE,ERRORS SE 3

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Case study 5 ias 8

  1. 1. During 2009 Bhuvan Ltd discovered that goods sold in 2008 were incorrectly included in inventory as at 31 03 2008 at Rs16250Bhuvan Ltd accounts for 2009 shows sales of Rs 2,60,000 and cost of goods sold of Rs 2,16, 250 ( it includesRs 16,250 for the error in the opening inventory) and income tax of Rs. 13, 125In 2008 Bhuvan Ltdsales 1,83,750Cost of goods sold -1,33,750Profit before tax 50,000Income Tax -15,000Profit after tax 35,0002008 opening retained earnings was Rs 50,000 and closed retained earnings was Rs 85,000Income tax rate was 30% in both the years and there are no other expenses or incomeShare capital was Rs 12,500 and except for retained earning there are no other items in the component ofequityShow the accounting treatment for the restatement of error.

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