SoFP and SoPL Revision

Question 1

Loan notes shown on the trial balance

Answer 1

Remember to calculate the cost by multiplying by coupon rate. That is the finance cost. Accrue the difference compared to what’s on the TB in Current Liabilities of the SoFP

Question 2

Tax and Deferred tax in the SoPL and SoFP

Answer 2

In the SOFP, it’s the provision for the year that goes into the SoFP.
Deferred taxation is an NCL
Tax is a CL

Question 3

Inventory on the SoFP

Answer 3

Always use closing inventory figure