[niki27]

so we won’t need to multiply denominators and numerators by 0.8 like we used to before?

[niki27]

Sorry, I have figured it out. It was a calculation mistake.

But I have another qn though. Why don’t we multiply the value of debt by (1-t)? why do we multiply the value of debt at the end instead by (1-t), as in this qn,
we dont take it as
10.6% *4261.4/ (4229.82 ( 1-20%) +4261.4)

and instead we do this
4229.82/(4229.82+4261.4) )*80%?

It doesn’t make sense.

Thanks

[niki27]

But isn’t that a no – no to the swap since they have to pay more?

Am I complicating the answer further? ?

Thanks

[niki27]

Correct me if I get this wrong but if there is an unofficial market that is doing worse than the offical market we are not in a position to consider that in the hedge?

This is confusing me.

[niki27]

Also, if laws and regulations were to be imposed on a company what would be the response to the risk?

[niki27]

@kengarrett said:

1 Check that all are produced in sequential order (eg there might be a pad of document ready to be used. Sequential control only works if someone subsequently checks all are processed eg by filing copies in numerical order and identifying missing ones.

What exactly do you mean by this sir?

[niki27]

Dear sir,
I have watched your lecture and have figured it out.

Thanks

[niki27]

Dear sir,
My apologies! Here is the actual question from the becker mock paper

Terrier Co makes annual purchases of $342,000 for a key component. It places one order per month for 5,000 components. The current terms are payment in full within 90 days, which Terrier Co meets, and the cost per component is $5·70.

The cost of ordering is $100 per order, while the cost of holding components in inventory is $0·50 per component per year. Terrier Co does not use the Economic Order Quantity (EOQ) model for inventory. The supplier has offered either a discount of 0·8% for payment in full within 30 days, or a discount of 3% on orders of 15,000 or more components.

If the bulk purchase discount is taken, the cost of holding components in inventory would increase to $1 per component per year due to a scarcity of warehousing space in the city.

Assume that there are 365 days in the year and that Terrier Co finances working capital using an overdraft costing 4.5% per year.
Which of the following are additional possible benefits if Terrier Co accepts the early settlement discount?
(1) Improved business reputation
(2) Shorter operating cycle
3) Higher current ratio

A 3 only
B 1 and 3 only
C 1 and 2 only
D 1, 2 and 3

Also, related to this qn, how do you calculate this?

What is the net benefit per year if Terrier Co accepts the early settlement discount?
A $2,713 B $2,736 C $206 D $1,471

Thanks!

[niki27]

Dear sir,

1. this qn was actually a part of a Section B mock question relating to early settlement discount. The answer says that the early pay off to suppliers leads to an increase in the cash operating cycle and will hence increase the overdraft causing it to remain unchanged. Is this true?

2. I have watched your lecture on receivables and have understood it clearly. However when it comes to payables, I’m confused as to how to go about it. Can you explain this to me with the help of an example?

Thanks!

[niki27]

Dear sir,
I think I’ve got it now.
So the first currency is the rate at which the company buys and and the second is the selling rate of the company and in reverse order for the banks. Am I right?

I guess I might have overlooked the bank buying and selling rate given in some questions and assumed it to be the same as the spot exchange rate.

Thanks for helping me out!

[niki27]

Dear sir,
So only the excess depn on revaluation is to be transferred to retained earnings? Not the entire depn balance given?

Also, where can I find revised published accounts questions to practice? I see a lot of questions with the old IAS 17 adjustments. Do I simply ignore those adjustments?

Thanks!

[niki27]

Dear sir,
So we just subtract closing and opening Retained Earnings which is the profit?

“Take one from the other and there’s the post-acquisition retained earnings.”

What exactly does this mean?

[niki27]

Dear Sir,
Out of curiosity, what would we do with the dividend then?

If this has never been examined, would this sort of thing come up in the future?

Another quick question, are share splits and reverse share splits examined under F7?

Thanks!

[niki27]

Dear sir,
I believe I’ve understood the prev question I asked , so no need to clear this doubt.

However, I’m curious as to the treatment of reimbursement according to IAS 37. Why is an asset created with the full amount? Wouldn’t it be easier to put it in Current assets directly?

Also, the amount recognized should not be greater than provision. Why’s this?

Thanks!

[niki27]

Dear sir,
Well, I did go through your notes. What I don’t understand is from after Accounting in the lessee’s books right from the right to use asset and lease liability ie, I don’t understand the logic behind the accounting treatment for both the asset and liability!

Hope it is clear now.

Also, what does the part after right to control mean?

Also, another quick question, in sale and leaseback. If the transfer of asset is NOT under IFRS 15, why is it a financial liability in the seller’s books and a financial asset in the buyer’s books?

Thanks!

[Author]

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