6. Tennis Ltd started trading on 1 January 2016. The statement of comprehensive income and the statement of financial position for the first year of trading are given as follows:
The price change indices for the year are given as follows:
All non-current assets and opening inventory were acquired on the first day of trading. Closing inventory was acquired on 30 November 2016.
Sales and purchases accrue evenly throughout the year.
Required
(a) Identify and explain the capital maintenance concept most closely associated with current value (replacement cost) financial statements.
(b) What are realised and unrealised holding gains?
(c) Prepare the current value (replacement cost) statement of comprehensive income for
the year ended 31 December 2016 and the current value (replacement cost) statement
of financial position as at 31 December 2016 for Tennis Ltd, showing realised and
unrealised holding gains.
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