formulas

Question 1

resources

Answer 1

= funding
= debt + equity
= debt + liabilities + equity
non current + current = debt + liability + equity

Question 2

equity

Answer 2

= called up capital + reserves

Question 3

assets

Answer 3

= liabilies + capital

Question 4

accounting equation income statement

Answer 4

Non-current asset + current asset = non-current liability + current liabilities + share capital + reserves

or

non current asset + current asset - current liability - non current liability = share capital + reserves + retained earnings

Question 5

Balance account

Answer 5

Opening BS +/- IS +/- CF = closing BS

Question 6

discontinued operations:
amount on I/S

Answer 6

= POST TAX PL of discontinued operation + post tax gain/loss on disposal

Question 7

Basic EPS

Answer 7

= net income - preferred dividends / weignted average of shares oustanding

Question 8

diluted EPS
- convertible preferred stock

Answer 8

= (net income) / (weighted average n of shares outstanding + new common shares if converted)

Question 9

diluted EPS
- convertible debt

Answer 9

= (net income + aftertac interest on convetible - preferred dividents) / (weighted av. N + new common shares )

Question 10

diluted EPS
- stock options, warrent etc.

Answer 10

= (net income - preferred dividends) / (weighted av. + new shared if exercised - shares REPURCHASED)

Question 11

inventory

Answer 11

inventories = quantity at hand x value

Question 12

determination of the cost

Answer 12

cost = cost of purchase + cost of conversion + other cost

Question 13

determination of NRV

Answer 13

NRV = selling price - cost to make sale

Question 14

equation of inventory

Answer 14

ending inv = beginning inv + purchases - cost of goods solv (COGS)

Question 15

COGS

Answer 15

cost of goods solv = BI + purchases - EI
COGS = COGS LIF - LIFO reserve increase5555555555

Question 16

weighted average

Answer 16

WA = ((total cost)BI + purchases) / total units

Question 17

weighted average cost of borrowing

Answer 17

= (amount 1 x interest + amount 2 x interest) / (amount 1 + amount 2)

Question 18

NBV

Answer 18

= carrying value - accumulated depriciation

Question 19

SOYD

Answer 19

: (cost - salvage value (residual)) x (year remaining /sum of the digits )

-> sum = n ((n+1)/2)

Question 20

declining balance

Answer 20

: cost x NBV

-> cost % = ((residual value / original cost ) -1)^(1/usefull life)

Question 21

double declining

Answer 21

: NBC x (2/ useful life)

Question 22

straight line

Answer 22

(cost - residual value ) / useful life 2

Question 23

To calculate the total costs of finance:

Answer 23

Total cost of finance = Total amount repayable − PV of future cash flows

Question 24

Closing Balance

Answer 24

Opening balance + Finance charge – Coupon paid = Closing Balance

Question 25

Convertible bond
This is treated by residual allocation method.

Answer 25

Total Market value of debt
- market value of debt WITHOUT conversion
= Residual balance

Question 26

Asset is capitalized at the lesser of FV of the asset and the PV of the minimum lease payments
MLP:

Answer 26

Minimum rental payments
+ guaranteed residual value by lessee
+ Bargain purchase option
= MLP minimum lease payments

Question 27

To calculate the charge of the financial lease on IS and BS:

Answer 27

Step 1. What value to capitalize (spread)?
- Lesser of FV or PV of MLP
To calculate MLP: Min. Rental payments + residual value + bargain purchase option

Step 2:
- Calculate the lease payments per year IS
Opening balance + Interest – Lease rental = Ending balance

Step 3.
Record:
o BS – assets: cost; depreciation, NBV
o BS – liability: non current, current, total obligation