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Statement of PL

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Statement of PL

  • This topic has 2 replies, 2 voices, and was last updated 1 year ago by Nikitagarwal.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • October 21, 2021 at 1:14 am #638657
    Nikitagarwal
    Participant
    • Topics: 153
    • Replies: 146
    • ☆☆☆

    Hi Chris,
    Hope you are well!
    Below is the question:
    The following information has been extracted from the books of Picklette
    for the year to 31 March 20X9.
    $000 $000
    Administrative expenses 170
    Interest paid 5
    Called up share capital
    (ordinary shares of $1 each) 200
    Dividend 6
    Cash at bank and in hand 9
    Income tax
    (remaining balance from previous year) 10
    Warranty provision 90
    Distribution costs 240
    Land and buildings:
    at cost (Land $110,000, Buildings $100,000) 210
    accumulated depreciation (at 1 April 20X8) 48
    Plant and machinery:
    at cost 125
    accumulated depreciation (at 1 April 20X8) 75
    Retained earnings (at 1 April 20X8) 270
    10% Loan note (issued in 20X7) 80
    Purchases 470
    Sales 1,300
    Inventory (at 1 April 20X8) 150
    Trade payables 60
    Trade receivables 728
    ––––– –––––
    2,123 2,123
    ––––– –––––

    1) The 10% loan note was issued on 1 April 20X7 and is repayable five
    years from that date.

    Now My question is for Finance cost we have to take 5 (already present in the question) and 80*10% = 8 so totaling to 8+5 = 13 right ?
    however in book only 8 is given
    can you please help me understand why

    b) In SFP – trade payables – 60 + 3( accrued income ) is added how did we arrived at this amount ?

    October 23, 2021 at 8:52 am #638843
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6473
    • ☆☆☆☆☆

    Hi,

    a) the only interest bearing instrument in the SFP is the loan notes, so interest cannot come from anywhere else. Given this then the total interest on these loan notes to be accrued will be the 8 and so we need to increase the 5 already recorded/paid to the 8 total figure.

    b) there isn’t any information within the question that points towards the accrued income of 3. Is there extra information from the question that is missing? We’d be looking for income earned but not yet invoiced.

    Thanks

    October 23, 2021 at 4:55 pm #638926
    Nikitagarwal
    Participant
    • Topics: 153
    • Replies: 146
    • ☆☆☆

    Got it now..Thank you

  • Author
    Posts
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