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At 30 September 20X3, Bowtock had included in its draft statement of financial position inventory $250 000 valued at cost. Up to 5 November 20X3, Bowtock had sold $100 000 of this inventory for $150 000. On this date, new government legislation (enacted after the year-end) came into force which meant that the unsold inventory could no longer be marketed and was worthless.
Bowtock is part way through the construction of a housing development. It has prepared its financial statements to 30 September 20X3 in accordance with IAS 11, Construction Contracts, and included a proportionate amount of the total estimated profit on this contract. The same legislation, referred to above (in force from 5 November 20X3), now requires modifications to the way the houses within this development have to be built. The cost of these modifications will be $500 000 and will reduce the estimated total profit on the contract by that amount, although the contract is still expected to be profitable.
Assuming the amounts are material, state how the information above should be reflected in the financial statements of Bowtock for the year ended 30 September 20X3.