Inventive Controls Ltd

question 17

Essay

Inventive Controls Ltd.was incorporated and started business early in January 2016 to manufacture electronic control devices to monitor traffic.Inventive purchased a small manufacturing plant and office building in a new industrial park and was in operation immediately.General ledger account balances at December 31,2016 are as follows:

At December 31,2016,there was no work-in-process,but 30% of the units manufactured remained in ending finished goods inventory.Inventive uses the straight-line method to calculate depreciation.
Required:
a.Calculate the value of cost of goods sold and ending finished goods inventory under IFRS.
b.Prepare an income statement for Inventive for the year ended December 31,2016.

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Definitions:

Rate Of Return

The success or failure of an investment over a tailored period, represented in terms of the percentage of the investment's cost price.

Preferred Stock

A type of stock that provides a fixed dividend before any dividends are paid to common stockholders and typically has priority over common stock in the event of bankruptcy.

Supernormal Growth

A period of elevated growth rates above and beyond a company's stable growth phase, often due to unique or exceptional circumstances.

Constant Growth Rate

A steady, unchanging rate at which a company's dividends or earnings are expected to grow over time.