Explanation

Changes in estimates used in accounting are necessary consequences of periodic presentations of financial statements. Preparing financial statements requires estimating the effects of future events. Examples of items for which estimates are necessary are uncollectible receivables, inventory obsolescence, service lives and residual values of depreciable able assets, warranty costs, periods benefited by a deferred cost, And recoverable mineral reserves.

Corroborative evidence is evidence from a different source that supplements and confirms other evidence. For example, oral testimony that a certain procedure was not performed may be corroborated by the absence of documentation.

Options and warrants instruments that give the holders the right to purchase ordinary shares of the entity) issued by the reporting entity are assumed to be exercised at the beginning of the period or at time of issuance, if later. The proceeds are assumed to be from an issuance at the average market price for the period. The difference between 1) the shares issued and 2) the shares that would have been issued at the average market price is an issue for no consideration. If the options are in the money exercise price is less than average market price), they are dilutive because 1) exceeds 2), and the excess will be added to the BEPS denominator. However, when the exercise price exceeds the average market price, the result is ant dilutive.

Cash collections from customers equals beginning accounts receivable, plus sales revenue, minus accounts written off, minus ending accounts receivable. In Year 2, Cash collections from customers were US $341.000$95,000 + $338,000 - $3,000 - $89,000). Balance sheets on December 31, Year 1, and December 31, Year 2, are presented below