exam semester 1 formula

Question 1

straight line and reducing balance relevant formula

Answer 1

straight line:
depreciable amount = initial cost - residual value
Annual depreciation chargee = depreciable amount / useful economic life
NBV at EOY = NBV at SOY - annual depreciation charge

reducing balance:
Annual depreciation = (NBV at SOY - residual value) x depreciation rate
NBV at EOY = NBV at SOY - annual depreciation

Question 2

Goodwill + amortisation + net assets formula
+ cost of sales

Answer 2

amortisation amount = cost of asset - residual value

net assets = total assets of smaller firm - total liabilities of smaller firm

goodwill = purchase price - net assets at fair value

= opening inventory + purchases - closing inventory

Question 3

Goodwill NCI formula

Answer 3

NCI value (@ acquisition date) = shares held x share price (@acquisition date)
NCI value (@ acquisition date) = net assets of subsidiary x % owned by NCI (@acquisition date)
Goodwill (@ acquisition date) = consideration + NCI acquisition - net assets acquisition

Question 4

formula for:
Interest expense
Prepayment
Share capital
Dividend (both equations)

Answer 4

Interest expense = interest rate x outstanding loan balance
Prepayment = (invoice amount x n months after YE)/ n months
Share capital = nominal value x n of shares
Dividend = pence per share x amount of shares
Dividend = % x nominal value x issued shares

Question 5

formula for:
NRV
change in PDD
P or L at disposal

Answer 5

NRV = selling price - costs to complete - costs to sell
Change in PDD = closing provision - opening provision
P or L at disposal = sale proceeds - NBV at disposal date