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Dec 09-Q2 Sandown, answer paper for question (a) income statement working
First, not sure it is just a template question, but
1) why showing investment income and Profit/Gain on sale for available-for-sale investments before Finance costs?
2) why adding 1800 to arrive as 4000 and then deducting from other comprehensive income? How to understand this 1800 as reclassified
3) besides usual ones, how to make sure put right accounts for calculating profit for the year and other comprehensive incomeHi,
this question has been amended at this part. Your doubt does not appear in the latest answers given in the revision kits.1)Investment Income is always shown before Finance Costs
2)there is no 1800 in the amended answer. only 2,200 shown as gain on investment in the comprehensive income.Hi Najiya, current IS for Sandown is
Profit/Gain on sale for available-for-sale investments 4,000
Profit before tax58,62554,625
Profit for the year56,65037,825
other comprehensive income
Gain on available-for-sale investments2,5002,200
Realised profit reclassified (recycled) to income on available-for-sale investment (1,800)
Total comprehensive income42,52540,025
But, one is Profit/Gain on sale for available-for-sale investments
The other is Gain on available-for-sale investmentsMaybe 2500 should not be deleted. There are two parts for available for sale investments
Part:One Profit/Gain on sale for available-for-sale investment 11m-8.8m=2.2m
Part Two Gain on available-for-sale investments 29m-26.5m=2.5mFor the above two, according to new way, which I should put for calculating Profit for this year, which for other comprehensive income, or there is no difference, just put together in total?
hi,
both 2,200 and 2,500 are shown in comprehensive income as Gain on investments. i.e, a total of 4,700.I am referring to bpp & kaplan revision kits for June 2012. This qn has been amended with slight difference in these books. I gave the answer according to bpp.
Thanks. I bought one with me now. BPP for 2012.
For SFP equity part as below stated
Other reserves 7500
RE (26,060+37,825+2,200-12,000)
My question is
1) Why 2,200 transfer from Other reserves to RE closing bal, but in IS, profit for the year just not included this 2,200.
2)2,200 acutally is gain on disposal-other comprehensive income. If it can be included in R.E., it should be included in profit for the year calculation in IS
3)2,500 is the change of F.V. reassessment gain, it always show as other comprehensive income right?
4)if asking equity change statement, which I should put 2,200 and 2,500. Shall I put 2,200 to R.E. or other reserves with 2,500?
5) will it be possible to put 2,500 as gain or loss to cost of sales if question is stipulated? Or never do like that. Just want to know. Thanks.1)if u see the note at the end of working 2……we can say, it is not necessary to make this transfer.
2)wat i studied frm kaplan text is that, profit on disposal is accounted for in the income statement. dont knw y they are taking in comprehensive income here. i cant compare wit kaplan as they didnt include this part when they amended the qn.
3)depends on the qn…here the qn says “recognise all changes in fair value through other comprehensive income”. when kaplan amended the qn, it says “uses fair value model allowed in IAS 40 to account for investment property” and thus 2,500 added to Investment Income.
hope that helps
thanks, but still have doubts, coz there is no uniform treatment. And I cant find my answer for my questions No.4 and 5.
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