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Please , what actually do the examiner mean by revised profit ?
When asked to calculate the revised profit for the year , taking into account the items from notes , are there procedures to this?
Are the actually asking for non cash items and cash items to calculated in preparation of the FS?
Why I asked there were items required to be subtracted and added to operating profit in order to arrive at the profit for the year and then prepared the SOFP.
I found out the depreciation and amortization of NCA ( intangible & tangible ), the CA of a capitalists development cost as per trial balance was $20m and Acc ‘ amortization was $6m . This give CA of $14m and for the current yr amortization, 20% ( reducing bal ) was used to amortize at $20m i.e 20% of $20m = $4000.
Why did Kaplan still use $20m instead of the CA of $14m ? ( $20m – $6 Acc’ depr)
The examiner will have given you a draft profit figure from the draft financial statements
There will also be a number of potential adjustments to be made to those draft figures
So the examiner is asking you for the revised profit figure after you have put through those relevant adjustments
BEWARE! Nor all of those adjustments will require an adjustment to profits!
OK?
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