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Financial Reporting > Test > Flashcards

Test Flashcards

1
Q

What is the layout for the statement of profit and loss?

A

Revenue
Less: COGS
Gross profit
Other income
Less: distribution cost
Less: administration cost
Profit from operations
Less: finance cost
Profit before tax
Less: tax
Profit for the year

Other comprehensive income
Revaluation
Total comprehensive income

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2
Q

How do you work out COGS?

A

COGS =
Opening inventory
Plus: purchases
Less: closing inventory
Plus: depreciation

Manufacturing wages also go into COGS

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3
Q

How do you calculate depreciation?

A

Depreciation straight line method = (use revalued amount)
cost * depreciation rate

Depreciation reducing balance method =
cost - acc. dep. = NBV
NBV * depreciation rate

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4
Q

How do you calculate tax?

A

Taxation =
current year estimate + amount in trial balance - deferred tax

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5
Q

How do you calculate the revaluation reserve?

A

Revaluation reserve (no depreciation) =
Revalued amount - cost

Revaluation reserve (with depreciation) =
cost - acc. dep. = NBV
revalued amount - NBV

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6
Q

How do you calculate total comprehensive income?

A

total comprehensive income =
Profit after tax + revaluation reserve

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7
Q

What costs go into distribution costs?

A

Distribution cost
Commission
Dep.

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8
Q

What costs go into administration costs?

A

Administration cost
Admin salaries
Dep.
Admin expenses accrued
Bad debt written off

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9
Q

What is the layout for the statement of financial position?

A

Assets
NCA
CA
Total assets
Equity and liabilities
Equity
Total equity
NCL
CL
Total liabilities
Total equity and liabilities

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10
Q

What goes into NCA?

A

Goodwill
PPE

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11
Q

What goes into CA?

A

Closing inventory
Trade receivables
Cash and cash equivalent

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12
Q

What goes into equity?

A

Share capital
Share premium
Revaluation reserve
Retained earnings

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13
Q

What goes into NCL?

A

Bank loan
Deferred tax

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14
Q

What goes into CL?

A

Bank overdraft
Current tax payable
Trade payables

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15
Q

How do you calculate PPE?

A

Cost
Less: Acc. dep.
Less: current year dep.
Add: revaluation

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16
Q

How do you calculate share premium?

A

(Issue price - previous price of shares) * no. of shares

17
Q

How to calculate RE?

A

RE =
Opening balance RE
Plus: profit for the year
Less: dividends

18
Q

What is the layout for the statement of changes in equity?

A

Along top:
Share capital
Share premium
Revaluation
RE
Total

Along side:
Opening balance
Issue of shares
Revaluation
Profit for the year
(-) dividends
Closing balance

19
Q

How do you calculate sale of PPE?

A

Cost - acc. dep. = NBV
NBV +/- gain/ loss on sale

20
Q

How do you calculate PPE bought?

A

Opening balance
Less: dep. for year
Less: disposal NBV
Less: closing balance

21
Q

How do you calculate dividends paid?

A

RE opening balance
Plus: profit for the year
Less: RE closing balance

22
Q

How do you calculate the group structure?

A

No. of shares purchased/ total no. of ordinary shares

23
Q

What does investment cancel out (consolidated financial statements)?

A

Investment will cancel out S Ltd share capital and share reserves.

24
Q

How do you calculate goodwill?

A

Find net assets:
Share capital
Plus: share premium
Plus: RE on date of acquisition
Plus: increase in fair value

Goodwill =
Cost of investment - (net assets * group structure) - impairment

25
Q

Where does fair value go on the consolidated statements?

A

Fair value is included in PPE (have to add it to PPE)

26
Q

How do you calculate consolidated RE?

A

(RE of S Ltd - RE on acquisition) * group structure
P Ltd RE + this - goodwill impairment

27
Q

How do you work out NCI?

A

(S Ltd share capital + S Ltd share premium + RE + increase in fair value) * NCI group share (structure)

28
Q

Where does NCI go on the FNST?

A

NCI is added to equity under consolidated RE
(consolidated statement of financial position)

29
Q

How do you calculate provisions for unrealised profit?

A

Profit of goods * % of unsold goods

This is then deducted from RE
This is then added to inventory

30
Q

How do you complete intra group sales in the consolidation statement of profit and loss?

A

Intra group sales are:
Deducted from revenue
Deducted from COGS

31
Q

How do you complete unrealised profit in the consolidation statement of profit and loss?

A

Unrealised profit is:
Deducted from inventories
Increased in COGS
Deducted from profit

32
Q

How is impairment recorded on the consolidated statement of profit and loss?

A

Impairment on goodwill is an operating expense

33
Q

What profit is used in the consolidated statement of profit and loss?

A

Only use POST-acquisition profit (pre-acquisition cancels with goodwill)

34
Q

How do you calculate NCI in the consolidated statement of profit and loss?

A

S Ltd profit after tax * NCI % of ownership

35
Q

What is included in financing operations?

A

Proceeds of share issue (cap + prem)
Increase in loan
Dividends paid

36
Q

What is the layout for a cashflow statement?

A

Profit from operation
Adjustments
Depreciation
Gain/ loss on sale of PPE
Operating cashflow before working capital
Inventories
Receivables
Payables
Cash generated from operations
Interest
Tax
Net cash from operating activities
Investing activities
Purchase of NCA
Proceeds of sale of PPE
Net cash from investing activities
Financing activities
Proceeds of share issue
Bank loan
Dividends paid
Net cash from financing activities
Net increase/ decrease in cash
Cash at beginning of year
Cash at end of year

37
Q

How to work out EPS?

A

Profit after tax / weighted average no. of shares

38
Q
A

Financial Reporting (6 decks)

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