Critically evaluate the objectives of financial statements

Question

Question 1: Critically analyses the internal and external users of financial statements.

Question 2: Balances extracted from the book of Ehsaan at 31 December 2013 are given below:
                                                                                  R.0
Motor vehicles at cost                                            180,000
Accumulated depreciation (Motor Vehicles)            70,000
The following transactions took place during the year 2014:
1^st   June purchased motor vehicles costing R.O 50,000 and paid by cheque
30 September    sold a motor vehicle for R.O 10,000, which was paid into the bank.
The motor vehicle cost R.O 27,500 when purchased on 1st January 2011.

Depreciation is calculated on motor vehicles at a rate of 15% p.a using straight line method.

Prepare the following accounts for the year ended 31st December 2014:

Required:

1. Calculate the annual depreciation for the year 2014.

2. Open the disposal account and compute whether there was gain or loss on sale of the motor vehicle.

3. Detail the effect on the Statement of Comprehensive Income of 2014.

4. Detail the effect on the Statement of Financial Position of 2013 and 2014.

Question 3: Critically discuss the disclosures required in IAS 12.

Question 4:

a) Critically evaluate the objectives of financial statements.
(b) Critically discuss the disclosures required in IAS 18.

Question 5: Discuss critically, the difference between financial accounting and managerial accounting.