True or False
1 Non-profit organizations are generally exempt from incometaxes, however corporations are not.
2 Both non-profit organizations and for profit organizationsprepare statements of stockholderâs equity and statements of cashflows.
3 The fund financial statements include all the accounts forassets and liabilities that are included in a for profitorganization.
True or False
1 Non-profit organizations are generally exempt from incometaxes, however corporations are not.
2 Both non-profit organizations and for profit organizationsprepare statements of stockholderâs equity and statements of cashflows.
3 The fund financial statements include all the accounts forassets and liabilities that are included in a for profitorganization.
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| Challenger Limited | |||
| Balance Sheets for the year | |||
| ended at 31 December | |||
| ( U.S dollars) | |||
| 2007 | 2008 | ||
| Assets | |||
| Non-Current Assets | |||
| Property , plan and equipment | $152,425,129.00 | $49,410,844.00 | |
| Total non-currentassets | $152,425,129.00 | $49,410,844.00 | |
| Current assets | |||
| Spare parts inventory | $6,956,849.00 | $12,874,676.00 | |
| Receivables and prepayments | $40,518,272.00 | $18,887,780.00 | |
| Due from related parties | $519,044.00 | $140,136.00 | |
| Cash and Cash equivalents | $2,842,879.00 | $2,753,003.00 | |
| TotalCurent assets | $50,837,044.00 | $34,655,595.00 | |
| Total Assets | $202,262,173.00 | $84,066,439.00 | |
| Equity and liabilities | |||
| Equity | |||
| Capital | $64,957,265.00 | $50,000,000.00 | |
| Additional Paid-in Capital | $70,795,653.00 | $15,000,000.00 | |
| Revaluation reserve | $16,782,544.00 | $1,403,983.00 | |
| Other | -$1,368,122.00 | ||
| R/E | $9,240,432.00 | $2,314,787.00 | |
| Total Equity | $160,407,772.00 | $68,721,770.00 | |
| Liabilities | |||
| Non-Current Liabilities | |||
| Borrowings | $4,545,190.00 | $738,499.00 | |
| Total Non-CurrentLiabilities | $4,545,190.00 | $738,499.00 | |
| Current Liabilities | |||
| Borrowings | $13,554,645.00 | $2,676,000.00 | |
| Trade and other payables | $14,060,820.00 | $7,016,164.00 | |
| Current Tax liabilities | $4,062,411.00 | $2,869,643.00 | |
| Provisions | $491,280.00 | ||
| Divididends and redemption payable | $3,078,302.00 | $2,044,363.00 | |
| Due to related parties | $3,061,753.00 | ||
| Total CurrentLiabilities | $38,309,211.00 | $14,606,170.00 | |
| Total liabilities | $42,854,401.00 | $15,344,669.00 | |
| Total equity and liabilities | $203,262,173.00 | $84,066,439.00 | |
| Challenger Limited | |||
| Statements of Income | |||
| for the year ended | |||
| 31 of december | |||
| ( US dollars) | |||
| 2007 | 2008 | ||
| Drilling revenue | $73,071,917.00 | $46,043,831.00 | |
| Drilling costs | -$52,933,369.00 | -$34,309,267.00 | |
| Gross Profit | $20,138,548.00 | $11,734,564.00 | |
| General and administrative Expenses | -$9,775,827.00 | -$8,021,383.00 | |
| Other income | $2,446,433.00 | $19,005.00 | |
| Other expense | -$1,870,000.00 | ||
| Operating (loss) / Profit fromoperations | $10,939,154.00 | $3,732,186.00 | |
| Finance income | $46,015.00 | $751,224.00 | |
| Finance cost | -$673,397.00 | -$559,662.00 | |
| (Loss) / profit before income tax | $10,311,772.00 | $3,923,748.00 | |
| Income tax | -$3,389,127.00 | -$2,307,594.00 | |
| (Loss)/ profit for the year | $6,922,645.00 | $1,616,154.00 |
Basis of Preparation The financial statements have been preparedin accordance with International Financial Reporting Standards(IFRS). The financial statements have been prepared under thehistorical cost convention as modified by the revaluation of therigs. Rigs include drilling equipment, well control equipment,electrical equipment, power plant, and so on.
Required:
A. Since the financial statements are prepared in U.S. dollars,does this imply that the financial statements are prepared inaccordance with U.S. GAAP? Why or why not?
B. List three major differences between this balance sheet incomparison to balance sheets prepared under U.S. GAAP.
C. Evaluate the performance of the company using the incomestatement. What appears to be the cause of the major change inperformance?
