Question

Topic 2 Tutorial Assignment - Conceptual Framework & Presentation of FS Adapted from Hui, W.F. and Ng, P.H. (2008). Accounting in Hong Kong. SCOPE. CITU) Assets and liabilities are not simply things owned" or "amounts owed". Rather, assets are rights to future economic benefits and liabilities are obligations to render future services. (a) A mini-bus company would generate most of its expected future benefits from employing skilled drivers and from using public roads. Therefore, its drivers and the public roads (b) The mini-bus company faces the risk of having a major road accident in the future, which may result in obligations to pay damages costs to injured passengers. This is a significant Consider this quotation as a background to the following questions: would make up most of the assets in the company balance sheet. BUS 20281 Question 1 Do you agree? liability to be recorded in the company balance sheet. Do you agree? (c) The accountant of the mini-bus company will record the fleet of mini-buses as an asset. you see any problems in measuring the value of the mini-buses in accordance with the concept of expected future economic benefits? Explain. Do Question 2 (Adapted from Hui, W.F., and Ng, P.H. (2008). Accounting in Hong Kong. SCOPE. CityU.) A manufacturer of plastic products spent $2,400,000 during the course of 2004 on research and development. $800,000 of this was spent on an unsuccessful attempt to design new and cheaper moulds which would have lasted twice as long as the moulds currently in use; this proved impossible because the moulds would not sustain the temperature of the molten plastic. $1,200,000 was spent on a very successful project to enable the gnomes to be cast in a cheaper form of plastic, and the remaining $400,000 was spent in the rental, heating and lighting costs of the research and development office. Required: Advise the manufacturer how the expenditure of $2,400,000 should be treated in the income statement (Statement of Profit & Loss) and balance sheet (Statement of Financial Position). Explain your reasoning carefully and indicate any assumptions you make.

is ethcs in accounting question and i want to know the question 1 and how to explain the answer