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  • AC330 Exam Notes Sample

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    Ricardo Kln
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    1) The document provides an overview of the key elements of an income statement and balance sheet for a comprehensive income reporting. It outlines the line items included in revenues, expenses, assets, liabilities, and equity. 2) Details are given for calculating specific line items like cost of goods sold, depreciation, finance charges, taxes, and revaluations. Methods are described for presenting leased assets, inventory, debt, and contract work balances. 3) Adjustments that may need to be made based on additional information are indicated, such as inventory amounts, prepayments, accruals, and taxes. The overview provides a framework and calculations for presenting a full set of financial statements.

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    Finance Note

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    AC330_Exam_Notes_sample

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    1) The document provides an overview of the key elements of an income statement and balance sheet for a comprehensive income reporting. It outlines the line items included in revenues, expenses, assets, liabilities, and equity. 2) Details are given for calculating specific line items like cost of goods sold, depreciation, finance charges, taxes, and revaluations. Methods are described for presenting leased assets, inventory, debt, and contract work balances. 3) Adjustments that may need to be made based on additional information are indicated, such as inventory amounts, prepayments, accruals, and taxes. The overview provides a framework and calculations for presenting a full set of financial statements.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Download as pdf or txt
    24 views3 pages

    AC330 Exam Notes Sample

    Uploaded by

    Ricardo Kln
    1) The document provides an overview of the key elements of an income statement and balance sheet for a comprehensive income reporting. It outlines the line items included in revenues, expenses, assets, liabilities, and equity. 2) Details are given for calculating specific line items like cost of goods sold, depreciation, finance charges, taxes, and revaluations. Methods are described for presenting leased assets, inventory, debt, and contract work balances. 3) Adjustments that may need to be made based on additional information are indicated, such as inventory amounts, prepayments, accruals, and taxes. The overview provides a framework and calculations for presenting a full set of financial statements.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 3

    AC330

    1) Comprehensive Income Statement & Balance Sheet

    Income Statement
    £000

    Sales Revenue Revenues/Turnover as in TB

    Cost of Goods Sold:


    Opening Inventory TB
    + Purchases TB
    - Closing Inventory Additional Information:
    Listed Closing Inventory - Damaged Goods +
    Recoverable Amount on Damaged Goods

    Gross Profit Sales Revenue - COGS

    Profit/Loss on Contracts Contract Price - Total Costs (Cost of Work Done + Cost
    Paid for Future Work) + Estimated Cost to Completion

    Expenses:
    Depreciation
    - L&B (Only Leasehold Land!) Depends on method stated - use standard straight line
    - PME or reducing balance
    - Lease Fair Value/UEL; if FV not given calculate (rental
    payment x annuity)

    Selling & Administration Costs TB - bad debt ± change in provision for doubtful debt +
    audit fees; if additional indicates charged to S&A
    remove development costs, cost of share issues,
    interest, lease rentals
    Operating Profit Gross Profit - Expenses
    Finance Charges:
    - Interest on Debenture Fair Value x Effective Interest Rare (IRR not coupon
    rate!); Fair Value = Net Proceeds = (Coupon Payment x
    Annuity Factor) + (Nominal Value x PV Interest Rate)
    - Lease Rental Payment x Annuity Factor (Number of
    *Note when payment made!! Payments, Interest Rate) x Interest Rate
    - Exchange Loss (usually on (Loan Amount x Exchange Rate at Current Date) -
    loans) (Loan Amount x Exchange Rate at Date of Loan)

    Net Profit Before Tax Operating Profit - Finance Charges

    Tax Estimated Corporation Tax ± Over/Under Provision

    Net Profit After Tax Net Profit Before Tax - Tax

    Revaluation Gain Analysis of Valuation:


    Remember to consider past + Land = Revalued Amount - Book Value
    current depreciation expense!! Buildings= Revalued Amount - (Book Value -
    Can’t just use value at cost (Depreciation Provision + Depreciation Expense)

    Total Comprehensive Income Net Profit After Tax + Revaluation Gain


    AC330

    Statement of Financial Position


    Cost Acc. Depr NBV

    NCA

    Land & Buildings TB (Provision + Cost - Accumulated


    Expense) Depreciation (unless
    revalued!)

    PME TB (Provision + Cost - Accumulated


    - Lease FV Lease Ex) Depreciation
    (Rental Payment x Annuity) Depreciation
    of lease on IS

    Development TB/Additional Comments Sum for Total NCA

    CA

    Inventory Closing Stock

    TR BS - Debt Written Off + Provision for


    Doubtful Debt

    Cash TB (adjustments from extra info)

    Prepayments Check Adjustments (interest/ Sum for Total CA


    electricity etc.)

    Gross Amount Contract Costs Incurred ± P/L -


    Due from Progress Billings
    Customers for (In CA if +ve; if -ve in CL)
    Contract Work

    CL

    TP TB ± Adjustments

    Current Lease Arrear: Rental Payment/(1+r)


    Advanced: Rental Payment

    Accruals Adjustments (interest, audit fees etc.)

    Tax Listed in adjustments Sum for Total CL

    Net CA Total CA - Total CL


    TA - CL (NCA + CA) - CL

    NCL

    Debentures Nominal Value

    Leases (Rent x Annuity Factor)/(1+r)

    Foreign Loans (Loan Amount x Exchange Rate at


    Current Date) Sum for Total NCL

    Net Assets TA - TL
    AC330

    Equity

    Share Capital TB

    Share Premium TB - Cost of Issuing New Shares

    Revaluation TB + Revaluation Gain


    Reserve

    Retained TB + NBAT - Dividends Sum for Total


    Earnings Equity = NA

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