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Accounting Notes > Financial Accounting, Analysis and Valuation (AC330) Notes
This is an extract of our Ac330 Exam Notes document, which we sell as part of our Financial Accounting, Analysis and Valuation (AC330) Notes collection written by the top tier of London School Of Economics students.
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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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