Statements Flashcards
Issue of shares for cash
Bank dr
Contributed equity cr
Issue of shares for asset
Asset account dr
Contributed equity cr
Shares issued to the public (2)
Bank dr
Applications cr
Applications dr
Contributed equity cr
Oversubscription of shares (3)
Bank dr
Applications cr
Applications dr
Contributed equity cr
Applications dr
Bank cr
Shares issued using a sharebroker (2)
Contributed equity dr
Bank cr
Bank dr
Contributed equity cr
What amount is used in the first journal entry for using a sharebroker?
Legal and prospectus costs
What amount is used in the second journal entry for using a sharebroker?
The total amount from shares minus the brokerage fee
Repurchase of shares
Contributed equity dr
Retained earnings (balance)
Bank cr
What amount is used for contributed equity when shares are repurchased?
Number of shares x initial sale price
What amount is used for bank when shares are repurchased?
Number of shares x repurchase price
How does a company pass the solvency test?
Must be able to pay its debts
Must have assets greater than liabilities
Revaluation of inventory
Cost of goods sold dr
Inventory cr
Revaluation of land
Land dr
Land revaluation surplus cr
Revaluation of buildings (3)
Depreciation on buildings dr
Accumulated depreciation on buildings cr
Accumulated depreciation on buildings dr
Buildings cr
Buildings dr
Buildings revaluation surplus cr
How do you calculate the revaluation amount for buildings?
Revaluation amount - (historical cost - accumulated depreciation)
Revaluation of shares/debentures (increase and decrease)
Shares/debentures dr
Increase in fair value of financial assets cr
Decrease in fair value of financial assets dr
Shares/debentures cr
Provisional tax payments throughout the year
Provisional tax paid dr
Bank cr
Actual tax payment (3)
Income tax expense dr
Income tax payable cr
Income tax payable dr
Provisional tax paid cr
Income summary dr
Income tax payable cr
What amounts are used in the three journal entries for actual tax payment?
- Actual tax amount
- Provisional tax paid (from estimated profit)
- Actual tax amount
Terminal tax
Income tax payable dr
Bank cr
What amount is used for terminal tax?
Actual tax amount - provisional tax paid
Payment of final dividends
Final dividend (year) dr Bank cr
Payment of interim dividends
Interim dividend (year) dr Bank cr
Payment of dividends (2)
Income summary dr
Retained earnings cr
Retained earnings dr Final dividend (year) cr Interim dividend (year) cr
What amount is used in the income summary/retained earnings journal entry for payment of dividends?
Profit for the year
What is the layout of the income statement? (12)
- Revenue
- Other income
- Total income
- Less Expenses (list; finance costs, COGS)
- Total expenses
- Profit before tax
- Income tax expense
- Profit for the year
- Other comprehensive income
- Gain on revaluation
- Other comprehensive income for the year
- Total comprehensive income for the year
Note 1
Revenue
Sales/fees
Note 2
Other income
list; includes increase in fair value of financial assets
Note 3
Auditor’s remuneration
list
Note 4
Finance costs
list interest expenses
What is the layout of the equity section in the statement of financial position?
Contributed equity Land revaluation surplus Buildings revaluation surplus Retained earnings Total equity
What is financial assets and where does it go?
Includes investments and debentures and goes under current assets
What are the non-current assets?
PPE and intangible assets
What is the contributed equity amount in the statement?
Amount calculated in note 9
What is the retained earnings amount in the statement?
Profit for the year - amount calculated in note 10 + retained earnings from trial balance
Note 5
Accounts receivable
Less allowance for doubtful debts
Note 6
Financial assets
Balance at the beginning of the year
Increase/decrease in fair value of financial assets
Balance at the end of the year
What is written at the bottom of note 6
The financial assets comprise … with a fair market value of …
Note 7
PPE Opening carrying amount Additions Disposals Depreciation Revaluations Closing carrying amount
Cost or valuation
Accumulated depreciation
Closing carrying amount
What amount is used for cost or valuation in the PPE table?
The adjusted/revalued amount from trial balance
What must be remembered for buildings in PPE
Accumulated depreciation is 0
Note 8 (3)
Loan
Secured over…
Rate of interest
Due for repayment
Note 9
Contributed equity Balance at ... Shares issued Shares repurchased Balance at ...
Note 10
Distributions Final dividend Interim dividend Total dividend Share repurchase Total distributions
What is written at the bottom of note 10? (5)
On (date) director’s proposed a final dividend for (year) of (amount per share) totalling (amount) to be paid on (date)
What sections are in the cash flow?
Cash from operations
Cash from investing
Cash from financing
What are each of the cash flow sections split into?
Cash was provided from
Cash was applied to
Net cash inflow/outflow from (operating/investing/financing)
How is the last section of the cash flow structured?
Net increase/decrease in cash held
Bank at start of the period
Bank balance at end of period
Cash from operating; provided from
Accounts receivable
Other income
Cash from operating; applied to
Accounts payable
Expenses paid
Interest paid
Tax paid
Accounts receivable
Last years + sales - bad debts - discount allowed - this years
Which amounts must be used for last/this years accounts receivable in the equation?
The amount in note 5, BEFORE allowance for doubtful debts is removed
Other income
Amount from income statement - accrued revenue from this year + accrued income from last year + income received in advance this year - income received in advance from last year
Purchases
COGS + inventory this year - inventory last year
Accounts payable
Last years + purchases - discount received - this years
Interest paid
Interest expense from income statement + last years accrued expenses - this years accrued expenses
Tax paid
Tax expense from income statement + last years tax payable - this years tax payable
Expenses paid
Add trial balance expenses + this years prepayments + last years accrued expenses - last years prepayment - this years accrued expenses
Cash from investing; provided from
Sale of non current asset
What amount is used for sale of non current asset
The sale amount or the carrying amount adjusted by gain/loss
Cash from investing; applied to
Purchase of non current asset
How do you know if a non current asset has been purchased?
Compare last years amount with this years amount; if the difference is the same as the revaluation amount there has not been a purchase
If they’re not the same, the difference is the amount used
How do you calculate the amount if a non current asset has been sold and purchased?
This years historical cost - (last years historical cost - historical cost of asset sold)
Cash from financing; provided from
Share issues
Loan/mortgage increase
How do you calculate the share issues amount for cash provided from financing?
Difference between this year and last years contributed equity
How do you calculate the increase in loan/mortgage amount for cash provided from financing?
The increase from last years to this years loan/mortgage
Cash from financing; applied to
Share repurchase
Loan/mortgage repayment
Dividends paid
How do you calculate the share repurchase amount for cash was applied to financing?
Number of shares x repurchase price
How do you calculate the loan/mortgage repayment amount for cash was applied to financing?
The decrease from last years to this years loan/mortgage
How do you calculate the dividends paid amount for cash was applied to financing? (if share repurchase has occurred)
Last years retained earnings + profit for the year - this years retained earnings balance ( - retained earnings portion of the share repurchase)
How do you calculate the retained earnings portion of the share repurchase to go into dividends paid?
Share repurchase amount - share sales amount
