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Many thanks for your kind response. I went through the notes and lectures a few more times, thankfully it is now much clearer. It must have been anxiety.
I’ll revisit your lectures on this topic. Perhaps that’ll help a bit. It’s the angle of the question that had my head spinning. I tried the approach on their previous examples, working backwards but I could see I was doing something wrong. Many thanks once again
Hi John. I can’t thank you enough for your response. Kindly do forgive me for an incomplete question. The answer they provided was as follows:
Contribution from sales of P between min and max points=170,000*20%=34,000. Required contribution from prod.R( which has 2nd highest CS ratio)=60’000-12500-34000=13500.Revenue reqd get R’s contribution is therefore 13500/0.15=90,000. Lowest break even sales=130k(minimum total sales)+170k(from P)+90k=390k. All this unfortunately didn’t help me to understand. I worked out the tot.min.contribution,12.5k, as you did. Then tot.min sales of 130k. My CS ratio was 12.5/130k= 0.9062. This gave me sales rev.of 60k/0.0962=624k. I humbly appreciate your input in regards to where the error is in my approach. Regards.Hi Mr Moffat.
I’d really appreciate your kind help with this question :
ABC Co has the following share capital:
100 000 6% irredeemable pref.shares
200 000 50c ord.shares
Retained earnings @ the beginning of the yr $125 000.
During the yr ended 31Dec x7 it made the ff profit:
Profit before tax $60 000
Income tax exp $10 000
Profit for the yr $50 000
Ordinary dividends paid and declared during the yr were as follows:
Interim dividend paid 5c per share.
Final dividend declared on 20 Jan x8 10c per share.
Required: Show the movement in retained earnings for ABC Co for the year ended 31 Dec x7.
My attempt was:
50 000-[6%*100 000]-200 000*.05=$34000.
Kindly help me see where I might be wrong.
Many thanks in advance. RegardsHi John
Two questions. The working of the one seems straight forward:
PCo acqd 75% ord. shares of Sco on that company’s Incorp’n in 20×3. Summarized stmt of P/L are set out below(cutting to the relevant part):
PCo profit for the year: 21000
SCo “”. “”. : 8000.
SCo had recorded sales of 5000 at gross marg.of 40%. 50% remained unsold on 31 Dec 20×3.Group profit for the yr was calc.to be 28000, after taking into account intra group “adjustments”
Workings for profit attrib.to NCI was:GP was 5000*40%=2000. Unrealized profit then=2000*50%=1000.Portion of unrealized profit attrib.to NCI=25%*1000=250.
Therefore profit attrib to NCI IS (8000*25%)-250=1750. This I understand.A second Q read:
Pumpkin Co has 90% equity share Cap of Squash Co.C of Sales were: Pumpkin co: 100k, Squash Co: 80k at year end 31/12/x3. During the yr squash sold goods costing 5k for 8k to Pumpkin. At yr end ALL OF the goods remained unsold.
I understand the consolidated COS to be 100k+80k-8k+3k=175k. Problem is,if Squash profit for the yr was 16k, what is the profit attrib to NCI(non-controlling interest):
BPP’working was: (16k-3k)*10%=1.3k. When I apply this same “technique” to the eg above I get a difft answer.
Could you kindly unpack this for me. I’ll provide more details if these prove to be inadequate.
Regards38 is young. I’m 40 and busy with F3 and F4. I’ve been a pharmacist for 15 yrs now and hit the ceiling before I knew it. A finance role with in my indusrry is what I desire the most and enjoy management accounting. I am very much prepared for a BIG pay cut but it will be worth it in the end. I say grit your teeth and get it done with, you won’nt regret it for a minute. Best of luck
Thanks John for the reply and I did watch the lecture. Note 5 of the eg in the OT lecture says a lodgement of $4000 had not appeared in the bank statement, and in the bank recon.statement the amount was ADDED. As per your comment and my understanding, the $875 HAS NOT APPEARED, but the amount is subtracted ie -972-875=1847. This what I meant by “I must have confused things somewhere”. Put another way, what is the difference between these two examples/questions.
Many many thanks once again for your patience.
RegardsHi John
I’m confused by this question, an eg from BPP interactive text kit.
It says: A company bank sttmt shows $715 direct debits and $353 Investment income not recorded in the cash book.The bank sttmt doesn’t show (a customer’s cheque for $875) entered in the cash book on the last day of the Acc.period. If the cash book shows a Cr Balance of $610,what balance appears on the bank sttmt?
I got the correct bal.per cash book of $972(Cr). But as to why they then said: Corrcted Bal per Cash book. (972)
Customer’s Cheque. (875), giving a bank balance of (1847), is confusing. I thought the Cheque was an outstanding Lodgement and therefore had to be Debited in the company’ a cash book and THEN Credited on the Bank statement. I must have confused things somewhere. I’d really be grateful for your help.
RegardsHi John
Q2 of the test refers. This was my working:
Rcvbls(173760-2040=171720). Gen.Allow.for Doubtful Debts(171720*2%=3434.40). Change Reqd to bring Allow.to this yr’s fig is (3434.40-5376=-1941.60 )which I credited the Allow.for Rcvbls with, together with the 3434.40 above. I then credited the Irrecov.Debt Exp with the 1941.60 to get a Bal.of $98.40. Could you kindly explain where I made a mistake?
RegardsHi John
Still on the same question. Using T accts, with a cost of $185000 less Accum.Depr of $55000, the carrying amt should be $130000. This leaves us with a discrepancy of $44400,ie $130000-$85600. Then there’s an addition of an asset of $30000 and a “loss on sale?” ie $25600 (asset disposal,debit) less accum.depr of $11200, giving a balance of $14400. This seems to add up but I wouldn’t be very sure that I would have to add the $14400 to the $30000 to explain the discrepancy. How could U clear my confusion?
RegardsHi again
Many thanks for the prompt reply. I did just that before posting my query. I even changed devices and tried streaming from my iPhone as I was earlier streaming from my iPad. What buffles me is that in both devices, the video stops at exactly the same spot.
Sorry to be a bit of a nag. I shudder to think about not being able to watch, especially since the videos are an invaluable help for my studies.
Best regards
Sifiso
