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- April 20, 2024 at 7:01 am #704319
Hi James,
Thanks for the comment on the lectures, much appreciated.
IFRS 5 states that for the detailed disclosure of the revenue/costs in profit or loss we need to cover all the periods presented in the financial statements. Sometimes this is taken to mean on the SFP also, but this is not the case.
Thanks
April 20, 2024 at 6:54 am #704318I’d always use the work certified unless told otherwise. We’re still unsure of why they haven’t used it in the question.
April 20, 2024 at 6:52 am #704317Hi,
It is a tricky one given the way the question is phrased. What we need to do is to find the standalone selling prices of the machine and support service. We’re given the selling price of the machine at 60,000 in the question. the support service standalone selling price is calculated from the cost and mark-up given in the question. The cost is the 10,000 and the mark -up is 50%, so applying this to the 10,000 gives us 15,000. The total standalone price of the two combined (the bundle) is therefore 75,000 (60,0000 machine + 15,000 support services).
We are only paying 50,000 for the two combined (the bundle) so are receiving a 25,000 discount overall (that being the difference between 75,000 and 50,000).
Hope that helps.
Thanks
April 20, 2024 at 6:46 am #704316Excellent, glad to hear that it was super helpful. Thanks
April 20, 2024 at 6:45 am #704315Hi,
If there is a revaluation downwards then the reduction is taken through profit or loss unless the asset has been previously revalued.
If the asset has been previously revalued then the downwards revaluation is firstly taken to the revaluation surplus and if this is then reduced to zero and there is still some of the downwards revaluation that needs to be accounted for then this will go through profit or loss.
Thanks
April 20, 2024 at 6:42 am #704313Hi,
I think that your answer of 500 is correct. In the answer given they have not taken account of the fact that the shares have a nominal value of 0.50 when issued. They have correctly worked out that there are 1,000 shares in issue (500/0.5) and then looked at their being 100 shares issued (1,000/10) but then they are issued at par, so it would be 50 (100 x 0.5).
I’d also not use a combined T-account for the issue of shares where a bonus issue has taken place. It needs to be split out between share capital and share premium.
Share capital:
b/f 500
Bonus 50
Cash 200
c/f 750Share premium:
b/f 100
Bonus (50)
Cash 300
c/f 350The total cash received then being 500 (200 + 300)
Thanks
April 20, 2024 at 6:33 am #704312You’ve typed out the question but do not ask a question related to it. If there is something that you do not understand in relation to the question above then please let me know and I can help out. Thanks
April 20, 2024 at 6:31 am #704311The site overheads are allocated costs to the site that will be directly attributable to the construction. Without the construction then none of the overheads will have been allocated to the construction.
April 20, 2024 at 6:29 am #704309The cash generated from operation is what the business generates from its core/day-to-day business before any interest or tax payments. The net cash flow from operations deducts the interest paid and tax paid.
April 13, 2024 at 10:47 am #703861Hi,
Everything can be done both ways and you will get the same answer. I prefer to use ledgers/T-accounts but others prefer workings. What you decide to use depends on what you understand best.
Thanks
April 13, 2024 at 10:46 am #703860Hi,
You should always look to clearly identify your workings.
Thanks
April 13, 2024 at 10:43 am #703859Hi,
What bit of it is it that you specifically do not understand?
Thanks
April 13, 2024 at 10:41 am #703858Hi,
No you would not be penalised for rounding in the exam. The simplest thing to do is to try and keep the rounding until the final answer, but if you round earlier then it will be fine.
Thanks
April 13, 2024 at 10:40 am #703857Hi,
I’m not here to just outright answer questions for you, it doesn’t help your learning if I do. Can you please attempt the question and then specifically highlight the parts that you are finding difficult and then I’ll gladly help you out.
Look forward to hearing back from you.
Thanks
April 13, 2024 at 10:38 am #703856Hi,
The profit in the individual financial statements is simply the proceeds less the initial cost of the investment. So here the profit should be $280,000 (=$680,000 – $400,000).
Thanks
April 13, 2024 at 10:37 am #703855Hi,
Pensions is not examinable under FR. It is examinable in SBR, so you would need to post your query on the SBR forum.
Thanks
April 13, 2024 at 10:36 am #703854Hi,
I think the answer is incorrect as the interest will already have been accounted for through profit or loss, so there is no reason as to why the answer has deducted the interest from the intra-group loan. the answer should just be the 30% of the profit for the year of 1300.
Thanks
April 13, 2024 at 10:32 am #703853Hi,
Thanks for the kind comments and great to hear that the work we do is helping.
The annual reserve transfer for the excess depreciation is going to be done every year until we either sell the asset or its carrying value gets to zero.
Thanks
April 13, 2024 at 10:31 am #703852Hi,
We need to use split accounting to correctly account for the convertible loan. The accounting for it is covered in chapter 11 of the class notes and in the videos. If you read through the class notes and watch the videos, try to attempt the question and if you are still struggling let me know but let me know specifically what you are struggling with then I can help further.
To help you get started you need to look at discounting the annual coupon interest (using the 2%) and the principal ($5m) to present value.
Thanks
April 4, 2024 at 8:46 am #703633Hi,
The value of the ROU asset is the present value of the least payments payable over the lease term. This will therefore require us to consider the initial payment and the future payments under the lease.
In Peach we are given the present value of the future lease payments, which includes the future lease payments but not the initial lease payment. To get the value of the ROU asset we will need to add on the initial lease payment to this figure.
In Plum we are given the present value of the minimum lease payments, which will include the initial and future lease payments in the calculation. We do not need to add on the initial payment to get the value of the ROU asset as it has already been included as part of the minimum lease payments.
Thanks
April 4, 2024 at 8:36 am #703629If you are studying full time then it could be done with a very detailed plan of when and what you intend to study on each day. This would need to cover both tuition and revision.
If you are not studying full time then I’d look to prepare over a longer period of time.
March 31, 2024 at 10:20 am #703544Hi,
You need to be watchful of the dates given in the question as here the sale is made on 1 January 20X2 and the cash received on 31 December 20X3, which is two years in total. The figure you have of 22,000 is the total finance income over the two years and the question is only asking for the finance income for the first year of the contract.
To work out the finance income we will apply the discount rate to the outstanding receivable figure of 178000 to get the 10680. We then record the income and increase the balance on the receivable.
For the second year (if asked) then you apply the same 6% to the new balance on the outstanding receivable.
Hope that helps clear it all up.
Thanks
March 31, 2024 at 10:16 am #703543It is the net figure that appears on balancing off the contract account.
March 31, 2024 at 10:12 am #703541Hi,
You can put things in capitals if you wish, although you should be writing the titles/descriptions in full and not using abbreviations.
Thanks
March 21, 2024 at 7:32 pm #703281Yes, it is just asking whether the profit will go up or down following the closing inventory adjustment.
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