Sparky Limited (SPL)is a Public Company and Must File Interim

question 24

Essay

Sparky Limited (SPL)is a public company and must file interim statements.SPL experienced the following events during the 2nd quarter of 20X11:
1.In the 1st quarter,an impairment loss on goodwill was recognized in the amount of $5 million.The circumstances leading to this loss have now changed,and the value of the goodwill is once again above its original cost.
2.During the 2nd quarter,the company shut down its manufacturing plant for annual maintenance.The annual maintenance costs totalled $7.5 million in the quarter.
3.As per a lease agreement,the company must pay additional rent charged at 3% of sales if annual sales are greater than $12 million.The contingent rent is payable on the total annual sales.The company reported sales in the 1st quarter related to this leased location of $3 million and in the 2nd quarter sales totalled $4 million.It is expected that sales for the 3rd and 4th quarter will be $5 million and $3 million,respectively.
4.The company made a large sale to a new customer for $6 million.This sale relates to a contract of services that will be provided over the next nine months,which commences in the first month of the 2nd interim period.
Required:
For each event,indicate the impact on the interim statement for the 3rd quarter using the guidance required by IAS 34.

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Definitions:

Copyright Law

Legal regulations that protect the rights of creators over their original works, preventing unauthorized use or distribution.

Primary Research Methods

These are direct methods of gathering data from sources or subjects, including surveys, interviews, observations, and experiments, used to collect original information.

Surveys

Research methods that involve collecting data from a sample of individuals to gather information about their opinions, behaviors, or characteristics.

Sampling Bias

A statistical bias that occurs when the sample is not representative of the population from which it was drawn.