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Hi Mike
When preparing SOFP, P&L…What would be your advice if we are short on time?
if we don’t have time to calculate/treat all the notes:-should we stop working on the remaining notes about 7mn before the deadline and “close” the fin statement (by “close” I mean calculate the line, sub-total+total)
-or should we keep doing the workings until time is over and leave unfinished/uncalculated the statements?
Thanks
LikaThe marks are in your workings! Look at any marking scheme.
There are frequently no marks for, for example, share capital. Why? Because it hasn’t changed! That is, it’s the same figure that was given in the question. If it HAS changed, for example a parent company has acquired a subsidiary through a share for share exchange but the parent has not yet accounted for the share issue, then you need to calculate the number of new shares issued as well as calculating the share premium on that issue of shares.
In that situation, there WILL be a mark for getting the share capital amount correct and another mark for the share premium. But both of those marks are gained when you do working W2 Goodwill.
What you really must do is to ensure that your workings are clear, neat and easily understood. When I’m doing examples on the screen during lectures, I liberally use arrows to indicate increases / decreases in the separate accounts.
So in the above example of the share issue, I indicate that share capital has increased by, say, 20,000 by writing “sh cap 20,000” followed by an up-pointing arrow (no idea how I can type up-pointing arrows!)
Check out a marking scheme and see how many marks are available for final amounts where that amount was actually given in the question and has not been subjected to a revision / amendment / correction.
There aren’t many
Ok?
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