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May 26, 2015 at 6:49 pm
Mr Moffat, could you please go through Retained Earnings in 2 3 words. I want to know ur explanation.
John Moffat says
May 26, 2015 at 6:58 pm
I am not sure what you are wanting! 23 words about what?
The retained earnings increase each year because of the profits that have not been paid out as dividends.
So the increase in the retained earnings will be the profit for the year less whatever dividend has been paid.
May 26, 2015 at 8:14 pm
So any decreases in profit lead to decreases in REtained earnings and vice versa, right?
E.g 1)depreciation policy changed from 10 % to 20 %.
What’s the effect? Retained earning should decrease ain’t it?
And 2) do losses in inventory have any effect on sales? Because I have read that ” no ” and didn’t understand why:) thank you.
May 27, 2015 at 9:25 am
Any profit increases retained earnings!
But if we reduce the profit then we reduce the retained earnings.
Why should losing inventory affect how much you sell? What you sell depends on what people want to buy!
April 29, 2015 at 1:04 am
I have a few questions:
1) What if there is a decrease in share capital & share premium? How do you treat this?
2) Say Yr1 there was no Loan but Yr2 there is loan of say 100,000. If you calculate loan repaid then its will be (0-100 = -100) Is this shown as a cash inflow or simply its left out?
Thanks in advance looking forward for a response as soon as possible.
Video helps a lot *thumps up*
April 29, 2015 at 8:26 am
In future, please ask this sort of question in the Ask the Tutor Forum rather than as a comment on a lecture.
1. Share premium can only decrease if there has been a bonus issue of shares. In that case there is no cash flow (share premium down, share capital up).
Share capital will not decrease – not in Paper F3.
2. In this case it means they have taken a loan (borrowed money) and therefore there is a cash receipt which will appear under the heading of financing activities.
April 18, 2015 at 8:24 am
Just wondering whether theirs a possibility of getting a question related to cash flow for one of the 15 mark questions. If so will it be in the Indirect method.
April 18, 2015 at 10:06 am
Yes – it is possible. (Try our mock exam!)
It ask about either method, but any numbers will probably be the indirect method.
April 13, 2015 at 3:13 pm
Will we be asked to prepare a full cash flow statement at the exam. Or is it more fill in the blanks
April 13, 2015 at 3:16 pm
Assuming you are taking the computer based exam, it will be fill in the blanks.
However you need to know the layout because you can be asked in the multiple choice section which heading certain items appear under.
March 30, 2015 at 1:59 pm
Great Video. Clearly explained. Now onto the example…!
January 20, 2015 at 4:34 pm
Yes – the cash balance also includes short-term investments.
Proceeds of sale of non-current assets is shown under ‘cash flows from investing activities’.
(Have you watched the lecture, because all these questions are actually answered in the lecture )
January 21, 2015 at 11:08 am
sorry sir, actually i hv watch already , but my english is poor, cannot fully understand.
thank you your explain now already understand and find out the answer. Thank so much.
January 20, 2015 at 12:30 pm
if question have cash in hand and bank overdraft how to do this?cash balance b/d and c/d is cash in hand or bank overdraft?
January 20, 2015 at 1:10 pm
The cash balance is the net of all cash balances (i.e. cash at bank plus cash in hand minus bank overdraft)
January 20, 2015 at 2:48 pm
short-term investments want to plus?
January 20, 2015 at 2:57 pm
proceeds of sale non-current asset investments it want to record in ?
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