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Ac330 Exam Notes

Accounting Notes > Financial Accounting, Analysis and Valuation (AC330) Notes

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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!)
- 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


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


Statement of Financial Position Cost

Acc. Depr


NCA Land & Buildings TB

(Provision +


(Provision +
Cost - Accumulated Ex) Depreciation Depreciation of lease on IS

- Lease



FV Lease (Rental Payment x Annuity) TB/Additional Comments

Cost - Accumulated Depreciation (unless revalued!)

Sum for Total NCA

CA Inventory

Closing Stock


BS - Debt Written Off + Provision for Doubtful Debt


TB (adjustments from extra info)


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


TB +- Adjustments

Current Lease

Arrear: Rental Payment/(1+r) Advanced: Rental Payment


Adjustments (interest, audit fees etc.)


Listed in adjustments

Net CA TA - CL

Sum for Total CL Total CA - Total CL (NCA + CA) - CL

NCL Debentures

Nominal Value


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

Foreign Loans

(Loan Amount x Exchange Rate at Current Date)

Net Assets

Sum for Total NCL TA - TL


Equity Share Capital


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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