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F7 questions alwayas ask for producing financial statements. It gives the trial balance and then there is further information which requires adjustments which might affect one or more of the financial statements. what is the best way to start solving the question and organising my work so that all the adjustments are reflected in the financial statements?.
In the workings! And probably start with the LAST paragraph requiring adjustment – something like “the company has proposed but not yet accounted for a divident of 5c per share” Do the calculation and show on your answer page, say “300,000 @ 5c per share = $15,000. Increase current liabilities 15,000 and decrease retained earnings $15,000”
Work your way UP the paragraphs until you have workings for all the adjustments. paragraph 1 is typically a tricky one concerning TNCA and depreciation calculations with additions and disposals involved. Leave that one until the last. And, if you cannot calculate a figure – leave it! Just guess. say on your answer paper “Depreciation on Motor vehicles – say $3,000”
Then start putting the revised figures into the Financial Statements.
Beware the loan interest! It will typically have been paid for only six months and you will need to accrue from the last payment date up to the end of the financial accounts period.
Does that help?
Cheers
Werty
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