Accounting Notes > Financial Accounting, Analysis and Valuation (AC330) Notes
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AC330
1) Comprehensive Income Statement & Balance Sheet Income Statement
PS000 Sales Revenue Cost of Goods Sold: Opening Inventory
+ Purchases
- Closing Inventory
Revenues/Turnover as in TB TB TB 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!)
- PME
- Lease
Depends on method stated - use standard straight line or reducing balance 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
- Lease
*Note when payment made!!
- Exchange Loss (usually on loans)
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) Rental Payment x Annuity Factor (Number of Payments, Interest Rate) x Interest Rate (Loan Amount x Exchange Rate at Current Date) (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 Remember to consider past +
current depreciation expense!!
Can't just use value at cost
Analysis of Valuation: Land = Revalued Amount - Book Value Buildings= Revalued Amount - (Book Value (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 +
Expense)
PME
(Provision +
Cost - Accumulated Ex) Depreciation Depreciation of lease on IS
- Lease
Development
TB
FV Lease (Rental Payment x Annuity) TB/Additional Comments
Cost - Accumulated Depreciation (unless revalued!)
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/
electricity etc.)
Gross Amount Due from Customers for Contract Work
Contract Costs Incurred +- P/L Progress Billings (In CA if +ve; if -ve in CL)
Sum for Total CA
CL TP
TB +- Adjustments
Current Lease
Arrear: Rental Payment/(1+r) Advanced: Rental Payment
Accruals
Adjustments (interest, audit fees etc.)
Tax
Listed in adjustments
Net CA TA - CL
Sum for Total CL Total CA - Total 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)
Net Assets
Sum for Total NCL TA - TL
AC330
Equity Share Capital
TB
Share Premium
TB - Cost of Issuing New Shares
Revaluation Reserve
TB + Revaluation Gain
Retained Earnings
TB + NBAT - Dividends
Sum for Total Equity = NA
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