The document provides financial information for Woodbank for the years ended 31 March 2014 and 2013. It analyzes Woodbank's financial performance and position in 2014 compared to 2013. It notes that including the recently acquired Shaw creates inconsistencies when making comparisons, as Shaw was only included for 3 months in 2014 but is fully included in the statement of financial position. Excluding Shaw, some ratios like return on capital employed are higher for 2014 compared to 2013, but including Shaw may make the performance look worse due to the inconsistency. Over time, as Shaw is fully included, it is expected to improve Woodbank's overall performance and profitability based on Shaw's historical returns.
This document contains the suggested solutions to the 2013 Taxation Technician Programme examination paper for Malawi. It addresses various taxation questions on topics like allowable deductions, taxable income calculation, capital gains exemptions, VAT registration requirements, and penalties for unpaid provisional tax. The document provides detailed explanations and calculations to demonstrate the correct treatment of the taxation issues covered in the exam.
The document provides an overview of financial statement analysis and accounting principles. It explains that the three main financial statements - the income statement, balance sheet, and statement of cash flows - are interconnected and provide important information about a company's performance, financial position, and cash flows. Key accounting concepts discussed include the accounting equation, double-entry bookkeeping, accrual vs cash accounting, depreciation, and the components and uses of each financial statement. Understanding these statements and principles is important for evaluating business decisions.
Accounting 970602 paper 2 structured questions for examination from 2016 spec...Alpro
Accounting 970602 paper 2 structured questions for examination from 2016 specimen mark scheme
Advanced Level
A Level
Zimsec
Cambridge
Alpro Learning Portal
Accounting
Accounts
Zimbabwe
Principle of accounts
1) The document contains 4 questions providing financial information for various companies, asking to prepare balance sheets and analyze financial ratios.
2) Question 4 asks which company Mr. Desai should prefer to supply goods to based on their financial information, considering factors like stock, debtors, cash, creditors.
3) Question 5 provides trading and profit & loss account and balance sheet for a company and asks to draft revised statements achieving certain objectives by changing ratios and amounts.
4) Question 6 gives financial ratios and asks to prepare a balance sheet for a company.
5) Question 7 asks to interpret accounting ratios based on summarized balance sheets and profit & loss statements for 2 years.
6) Question 8 provides more
Ekiti State of Nigeria provided a statement of its consolidated revenue fund and capital development fund for the mid-year period ending June 30, 2017. The consolidated revenue fund showed total revenue of 22.4 billion Naira against a budget of 36.9 billion Naira, representing 61% budget performance. Total expenditure was 24.5 billion Naira against a budget of 27.5 billion Naira, resulting in an operating deficit of 935 million Naira. The capital development fund had total revenue of 8.8 billion Naira against a budget of 10.1 billion Naira, and total capital expenditure was 6.5 billion Naira against a budget of 19.7 billion N
Accounting 970643 paper 4 problem solving (supplementary topics) october nove...alproelearning
Accounting 970643 paper 4 problem solving (supplementary topics) october november 2014
Advanced Level
A Level
Zimsec
Cambridge
Alpro Learning Portal
Accounting
Accounts
Zimbabwe
Principle of accounts
This document summarizes the business of a company that provides infrastructure services including electric power, communications, and pipeline services. It discusses the company's end markets and customers, historical and projected financial data, strategies for growth in areas like 5G networks and renewable energy, and metrics showing increases in revenue, earnings, and backlog between 2015-2019. Key points include that the top 10 customers accounted for 37% of revenues in 2018, revenues are projected to grow from $7.6B in 2015 to $12B in 2019, and adjusted EBITDA and backlog have also increased substantially over this period.
This document contains the suggested solutions to the 2013 Taxation Technician Programme examination paper for Malawi. It addresses various taxation questions on topics like allowable deductions, taxable income calculation, capital gains exemptions, VAT registration requirements, and penalties for unpaid provisional tax. The document provides detailed explanations and calculations to demonstrate the correct treatment of the taxation issues covered in the exam.
The document provides an overview of financial statement analysis and accounting principles. It explains that the three main financial statements - the income statement, balance sheet, and statement of cash flows - are interconnected and provide important information about a company's performance, financial position, and cash flows. Key accounting concepts discussed include the accounting equation, double-entry bookkeeping, accrual vs cash accounting, depreciation, and the components and uses of each financial statement. Understanding these statements and principles is important for evaluating business decisions.
Accounting 970602 paper 2 structured questions for examination from 2016 spec...Alpro
Accounting 970602 paper 2 structured questions for examination from 2016 specimen mark scheme
Advanced Level
A Level
Zimsec
Cambridge
Alpro Learning Portal
Accounting
Accounts
Zimbabwe
Principle of accounts
1) The document contains 4 questions providing financial information for various companies, asking to prepare balance sheets and analyze financial ratios.
2) Question 4 asks which company Mr. Desai should prefer to supply goods to based on their financial information, considering factors like stock, debtors, cash, creditors.
3) Question 5 provides trading and profit & loss account and balance sheet for a company and asks to draft revised statements achieving certain objectives by changing ratios and amounts.
4) Question 6 gives financial ratios and asks to prepare a balance sheet for a company.
5) Question 7 asks to interpret accounting ratios based on summarized balance sheets and profit & loss statements for 2 years.
6) Question 8 provides more
Ekiti State of Nigeria provided a statement of its consolidated revenue fund and capital development fund for the mid-year period ending June 30, 2017. The consolidated revenue fund showed total revenue of 22.4 billion Naira against a budget of 36.9 billion Naira, representing 61% budget performance. Total expenditure was 24.5 billion Naira against a budget of 27.5 billion Naira, resulting in an operating deficit of 935 million Naira. The capital development fund had total revenue of 8.8 billion Naira against a budget of 10.1 billion Naira, and total capital expenditure was 6.5 billion Naira against a budget of 19.7 billion N
Accounting 970643 paper 4 problem solving (supplementary topics) october nove...alproelearning
Accounting 970643 paper 4 problem solving (supplementary topics) october november 2014
Advanced Level
A Level
Zimsec
Cambridge
Alpro Learning Portal
Accounting
Accounts
Zimbabwe
Principle of accounts
This document summarizes the business of a company that provides infrastructure services including electric power, communications, and pipeline services. It discusses the company's end markets and customers, historical and projected financial data, strategies for growth in areas like 5G networks and renewable energy, and metrics showing increases in revenue, earnings, and backlog between 2015-2019. Key points include that the top 10 customers accounted for 37% of revenues in 2018, revenues are projected to grow from $7.6B in 2015 to $12B in 2019, and adjusted EBITDA and backlog have also increased substantially over this period.
The document provides financial information for multiple companies, including income statements, balance sheets, and additional notes. It asks to prepare cash flow statements for the companies using the indirect or direct method. Key details include net profits, asset purchases and sales, debt repayments, dividend payments, and changes in working capital accounts. Cash flow statements are to be prepared in a standard format with sections for operating, investing, and financing cash flows.
This document summarizes Quanta Services, a leading infrastructure services provider, over multiple years. It highlights Quanta's growth in revenues from $526 million in 2015 to an estimated $892 million in 2019. Adjusted EBITDA margins have also increased from 6.9% in 2015 to an estimated 7.8% in 2019. Free cash flow has grown but working capital needs have also increased due to overall revenue growth. The document also outlines Quanta's diversified customer base and end markets, including opportunities from trends like 5G deployment and electric grid modernization.
1. The document contains journal entries for revaluation of assets and liabilities for various partnerships. Debits and credits are made to revaluation accounts, asset accounts, liability accounts and partner's capital accounts.
2. Accumulated reserves and undistributed profits are distributed among old partners in their old profit sharing ratios.
3. Goodwill is calculated based on past profits and a partner is admitted with a capital contribution. Necessary journal entries are made for cash received and treatment of goodwill.
The document discusses several important concepts for capital budgeting decisions:
1) Only incremental cash flows that result directly from an investment are relevant, not sunk costs or accounting earnings. Taxes, inflation, and side effects must also be considered.
2) There are different methods to compute operating cash flow depending on available information, such as the bottom-up, top-down, and tax shield approaches.
3) When inflation is present, cash flows should be either nominal and discounted at nominal rates, or real and discounted at real rates to properly account for inflation.
4) Equivalent annual cost converts cash flows of unequal lengths, like investment alternatives
The document discusses net present value analysis and capital budgeting. It provides an example of calculating the cash flows and net present value for a proposed bowling ball machine investment by the Baldwin Company over 5 years. It also discusses how to account for inflation in capital budgeting calculations, using an example of a proposed TV production investment by Sony International over 4 years.
This document contains 9 problems related to leverage analysis for various companies. The problems include calculating degrees of operating, financial, and combined leverage given income statements and capital structures. They also involve computing earnings per share under different financing scenarios and levels of earnings before interest and taxes.
The document provides an overview of key concepts in accounting for plant assets, natural resources, and intangible assets from Chapter 8, including determining the cost of plant assets, depreciation methods, revising periodic depreciation, accounting for natural resources, intangible assets, exchanging plant assets, and calculating the asset turnover ratio. It includes examples and exercises for each concept with step-by-step solutions.
PARTNERSHIP ACCOUNTS - Profit & Loss Appropriation accountKalaiSelvi169
The document contains the solution to multiple accounting sums involving the preparation of Profit and Loss Appropriation Accounts and Capital Accounts of partners. Specifically, it provides the accounting entries to distribute profit among partners based on their profit sharing ratios, deduct interest on capital and drawings, and transfer the final balances to partners' capital accounts. The solutions show the detailed workings and calculations involved in each step of the process.
This document contains an index of topics related to financial management that will be discussed in class. The topics covered include accounting ratios, leverage, capital structure, cost of capital, capital budgeting, working capital management, receivables management, cash budgeting, capital budgeting and risk analysis, and dividend decisions. The index provides the page numbers for where each topic begins.
This document contains the suggested solutions to the 2011 Taxation paper for the Accounting Technician Programme examination in Malawi. It addresses 6 questions on various taxation topics like capital allowances, capital gains/losses, tax treatment of clubs/associations, foreign exchange gains/losses, direct vs indirect taxes, computation of individual income tax, penalties under the Taxation Act, VAT registration requirements, and fringe benefits. The document provides detailed explanations and calculations to demonstrate the correct treatment of the issues under Malawi's tax laws.
PARTNERSHIP ACCOUNTS - Adjustments after closing the accountsKalaiSelvi169
This document discusses the calculation of opening capital balances and profit distribution for three partners - Lakshman, Nagarajan, and Parthiban. It provides the opening capital amounts for each partner and calculates their share of profit based on capital ratios. Parthiban's profit share is adjusted to a minimum of Rs. 7,500 as his initial share was lower, with Lakshman compensating the difference. Appropriate accounting entries are made in the Profit & Loss Appropriation account and Partners' Capital accounts to distribute the net profit of Rs. 22,500 among the partners as per their revised profit shares.
The document provides a comprehensive problem solution involving journal entries for various transactions of Winterschid Company throughout the year. It includes entries for equipment disposal, accounts receivable collection and bad debts, interest revenue and expense accruals, building and equipment depreciation, patent amortization, unearned rent, and payroll expenses. The document also provides Winterschid Company's income statement, owner's equity statement, balance sheet, and trial balance for the year ended December 31, 2010.
This document contains the suggested solutions to the 2014 examinations for the Accounting Technician Programme in Malawi. It includes sample computations and explanations for various taxation questions. Some key points:
- Section A provides sample computations for taxable income, capital allowances, foreign exchange gains/losses, and taxes on dividends.
- Section B answers additional questions on VAT registration requirements, capital allowances, fringe benefits tax, direct vs indirect taxes, and conditions for deducting expenses.
- Sample questions cover topics like taxable income, capital gains/losses, withholding taxes, and the objectives of various taxes in Malawi. Explanations of tax concepts and calculations are provided throughout.
- The document contains worked examples of profit and loss appropriation accounts and current accounts for partnerships with guaranteed partners.
- It allocates profits between partners based on their capital ratios and guarantees minimum profit shares for some partners.
- Any shortfall between the guaranteed amount and the partner's share based on capital ratio is made up from the other partners' shares.
This document contains examples and solutions for calculating real interest rates, preparing balance sheets, cash flow statements, and financial ratios. It discusses the error in using a rule of thumb to calculate real rates compared to the correct formula. It also shows how to prepare balance sheets according to the Companies Act format, and classified cash flow statements along with the cash flow identity. Finally, it demonstrates the calculation of times interest covered, inventory turnover, and current ratios using financial information provided.
- The document provides guidance answers and valuation scheme for the IPCC exam accounting paper.
- It includes solutions to multiple questions related to computation of basic earnings per share, lease accounting, capitalization of borrowing costs, departmental trading and profit and loss accounts, foreign branch accounts, insurance company accounts, liquidator's statement of receipts and payments, and bank capital fund ratios.
- Workings and journal entries are provided with marks allocated for each part of the solutions.
1. The document provides financial information for Prodigal and its subsidiary Sentinel, including consolidated income statements, statements of financial position, and related notes.
2. It also provides financial information for Highwood, including income statements, statements of changes in equity, statements of financial position, and related notes.
3. Additionally, it provides a statement of cash flows for Bengal and discusses factors that could explain differences in its profit between years.
This document presents the statement of financial position and statement of comprehensive income for PT Luber and PT Al Caisario as of 31 December 2011 and 2010 respectively.
The statement of financial position of PT Luber shows total assets of Rp3.8 billion consisting of current assets, property and equipment, long term investments and intangible assets. Total liabilities are Rp2.7 billion comprising current and non-current liabilities. Total equity is Rp1.1 billion.
The statement of comprehensive income of PT Al Caisario for the year ended 31 December 2010 shows net income of Rp86 billion comprising income from continuing and discontinued operations, offset by comprehensive loss of Rp14 billion.
Question 3Q=50,000 - (25 * P)FC=2,750,000VC=200/unitTC=FC+VCTVC=VC/unit * # of Units ProducedTC=$2,750,000 + 200QQ=50,000 - (25 * P)25P=50,000-QP=(50,000/25) - (1Q/25)P=2000 - 0.04QTR=P * QTR=(2000 - 0.04Q) * QTR=2000Q-0.04Q2MR=dTR=2000 - 0.08QdQMC=dTC=200dQMR = MC at profit maximizing levelQ2000 - 0.08Q = 200Q0.08Q = 2000 - 200Q0.08Q = 1800Q1800/0.08 = 25,500Q=25,500P=2000 - 0.04QP=2000 - 0.04 (22,500)P=2000 - 900P=$1,100AC=TC/QTC=$2,750,000 + 200 (22,500)TC=$2,750,000 + 4,500,000TC=7,250,000AC=MCAC=$200Profit=TR - TCTR=P * QTR=$1,100 * 22,500TR=24,750,000.00Profit=24,750,000 - 7,250,000Profit=17,500,000====
Question 4Impacts of the ransactions on the major financial statementsStatement of cash flowsCash flows from operating activitiesRevenuesDiscount on goods$ (800,000.00)Total operating cash inflowsCash flows from investing activitiesIncrease in the value ofProperty, Plant, and Equipment$ 2,100,000.00Net flow from other non operating activitiesDecrease in accounts receivable$ (1,500,000.00)Total cash flows $ (200,000.00)Income statementRevenues$ (800,000.00)ExpensesBad debt expense$ 1,500,000.00Gross profit$ (2,300,000.00)Add: Income from non-operating activities$ 2,100,000.00Net income$ (200,000.00)Balance sheetsCurrent assetsLiabilities and stockholders equityCash$ 2,100,000.00Dividends & retained earnings$ 2,100,000.00$ (800,000.00)Less:$ (1,500,000.00)Net change in cash$ 1,300,000.00$ (800,000.00)Accounts receivable$ (1,500,000.00)Change in the Total assets$ (200,000.00)Change in stockholders equity$ (200,000.00)A write-off of an Accounts Receivable amount of $1.5 millionThis reduces the accounts receivable in the balance sheet by $1.5 million.In the income statement, the operating expense (bad debts expense increases by $1.5 million) thus decreasing the net income by the same amount.In the statement of cash flows, the change in the accounts receivable decreases by $1. millionProperty, Plant, and Equipment asset valued at $5 million for cash, which generated a profit of $2.1 million.Cash flow from the sale of property, plant and equipmet increases in the statement of cash flows by $2.1 millionIncome from non operating activities increases by $2.1 million Cash in the balance sheet will increase by $2.1 millionIPS gave a 10% discount to a customerThe revenues in the income statement will decrease by $0.8 millionCash in the balance sheet statement will decrease by $0.8 millionIn the statement of cash flows, the net income will decrease by $0.8 million
AMD Income StatementConsolidated Statements of Operations - USD ($) shares in Millions, $ in Millions12 Months EndedDec. 31, 2016Dec. 26, 2015Dec. 27, 2014Income Statement [Abstract]Net revenue$4,272$3,991$5,506Cost of sales3,2742,9113,667Gross margin9981,0801,839Research and development1,0089471,072Marketing, general and administrative460482604Amortization of acquired intangible assets0314Restructuring and other special charges, net-1012971Licensing gain- ...
The document provides financial information for multiple companies, including income statements, balance sheets, and additional notes. It asks to prepare cash flow statements for the companies using the indirect or direct method. Key details include net profits, asset purchases and sales, debt repayments, dividend payments, and changes in working capital accounts. Cash flow statements are to be prepared in a standard format with sections for operating, investing, and financing cash flows.
This document summarizes Quanta Services, a leading infrastructure services provider, over multiple years. It highlights Quanta's growth in revenues from $526 million in 2015 to an estimated $892 million in 2019. Adjusted EBITDA margins have also increased from 6.9% in 2015 to an estimated 7.8% in 2019. Free cash flow has grown but working capital needs have also increased due to overall revenue growth. The document also outlines Quanta's diversified customer base and end markets, including opportunities from trends like 5G deployment and electric grid modernization.
1. The document contains journal entries for revaluation of assets and liabilities for various partnerships. Debits and credits are made to revaluation accounts, asset accounts, liability accounts and partner's capital accounts.
2. Accumulated reserves and undistributed profits are distributed among old partners in their old profit sharing ratios.
3. Goodwill is calculated based on past profits and a partner is admitted with a capital contribution. Necessary journal entries are made for cash received and treatment of goodwill.
The document discusses several important concepts for capital budgeting decisions:
1) Only incremental cash flows that result directly from an investment are relevant, not sunk costs or accounting earnings. Taxes, inflation, and side effects must also be considered.
2) There are different methods to compute operating cash flow depending on available information, such as the bottom-up, top-down, and tax shield approaches.
3) When inflation is present, cash flows should be either nominal and discounted at nominal rates, or real and discounted at real rates to properly account for inflation.
4) Equivalent annual cost converts cash flows of unequal lengths, like investment alternatives
The document discusses net present value analysis and capital budgeting. It provides an example of calculating the cash flows and net present value for a proposed bowling ball machine investment by the Baldwin Company over 5 years. It also discusses how to account for inflation in capital budgeting calculations, using an example of a proposed TV production investment by Sony International over 4 years.
This document contains 9 problems related to leverage analysis for various companies. The problems include calculating degrees of operating, financial, and combined leverage given income statements and capital structures. They also involve computing earnings per share under different financing scenarios and levels of earnings before interest and taxes.
The document provides an overview of key concepts in accounting for plant assets, natural resources, and intangible assets from Chapter 8, including determining the cost of plant assets, depreciation methods, revising periodic depreciation, accounting for natural resources, intangible assets, exchanging plant assets, and calculating the asset turnover ratio. It includes examples and exercises for each concept with step-by-step solutions.
PARTNERSHIP ACCOUNTS - Profit & Loss Appropriation accountKalaiSelvi169
The document contains the solution to multiple accounting sums involving the preparation of Profit and Loss Appropriation Accounts and Capital Accounts of partners. Specifically, it provides the accounting entries to distribute profit among partners based on their profit sharing ratios, deduct interest on capital and drawings, and transfer the final balances to partners' capital accounts. The solutions show the detailed workings and calculations involved in each step of the process.
This document contains an index of topics related to financial management that will be discussed in class. The topics covered include accounting ratios, leverage, capital structure, cost of capital, capital budgeting, working capital management, receivables management, cash budgeting, capital budgeting and risk analysis, and dividend decisions. The index provides the page numbers for where each topic begins.
This document contains the suggested solutions to the 2011 Taxation paper for the Accounting Technician Programme examination in Malawi. It addresses 6 questions on various taxation topics like capital allowances, capital gains/losses, tax treatment of clubs/associations, foreign exchange gains/losses, direct vs indirect taxes, computation of individual income tax, penalties under the Taxation Act, VAT registration requirements, and fringe benefits. The document provides detailed explanations and calculations to demonstrate the correct treatment of the issues under Malawi's tax laws.
PARTNERSHIP ACCOUNTS - Adjustments after closing the accountsKalaiSelvi169
This document discusses the calculation of opening capital balances and profit distribution for three partners - Lakshman, Nagarajan, and Parthiban. It provides the opening capital amounts for each partner and calculates their share of profit based on capital ratios. Parthiban's profit share is adjusted to a minimum of Rs. 7,500 as his initial share was lower, with Lakshman compensating the difference. Appropriate accounting entries are made in the Profit & Loss Appropriation account and Partners' Capital accounts to distribute the net profit of Rs. 22,500 among the partners as per their revised profit shares.
The document provides a comprehensive problem solution involving journal entries for various transactions of Winterschid Company throughout the year. It includes entries for equipment disposal, accounts receivable collection and bad debts, interest revenue and expense accruals, building and equipment depreciation, patent amortization, unearned rent, and payroll expenses. The document also provides Winterschid Company's income statement, owner's equity statement, balance sheet, and trial balance for the year ended December 31, 2010.
This document contains the suggested solutions to the 2014 examinations for the Accounting Technician Programme in Malawi. It includes sample computations and explanations for various taxation questions. Some key points:
- Section A provides sample computations for taxable income, capital allowances, foreign exchange gains/losses, and taxes on dividends.
- Section B answers additional questions on VAT registration requirements, capital allowances, fringe benefits tax, direct vs indirect taxes, and conditions for deducting expenses.
- Sample questions cover topics like taxable income, capital gains/losses, withholding taxes, and the objectives of various taxes in Malawi. Explanations of tax concepts and calculations are provided throughout.
- The document contains worked examples of profit and loss appropriation accounts and current accounts for partnerships with guaranteed partners.
- It allocates profits between partners based on their capital ratios and guarantees minimum profit shares for some partners.
- Any shortfall between the guaranteed amount and the partner's share based on capital ratio is made up from the other partners' shares.
This document contains examples and solutions for calculating real interest rates, preparing balance sheets, cash flow statements, and financial ratios. It discusses the error in using a rule of thumb to calculate real rates compared to the correct formula. It also shows how to prepare balance sheets according to the Companies Act format, and classified cash flow statements along with the cash flow identity. Finally, it demonstrates the calculation of times interest covered, inventory turnover, and current ratios using financial information provided.
- The document provides guidance answers and valuation scheme for the IPCC exam accounting paper.
- It includes solutions to multiple questions related to computation of basic earnings per share, lease accounting, capitalization of borrowing costs, departmental trading and profit and loss accounts, foreign branch accounts, insurance company accounts, liquidator's statement of receipts and payments, and bank capital fund ratios.
- Workings and journal entries are provided with marks allocated for each part of the solutions.
1. The document provides financial information for Prodigal and its subsidiary Sentinel, including consolidated income statements, statements of financial position, and related notes.
2. It also provides financial information for Highwood, including income statements, statements of changes in equity, statements of financial position, and related notes.
3. Additionally, it provides a statement of cash flows for Bengal and discusses factors that could explain differences in its profit between years.
This document presents the statement of financial position and statement of comprehensive income for PT Luber and PT Al Caisario as of 31 December 2011 and 2010 respectively.
The statement of financial position of PT Luber shows total assets of Rp3.8 billion consisting of current assets, property and equipment, long term investments and intangible assets. Total liabilities are Rp2.7 billion comprising current and non-current liabilities. Total equity is Rp1.1 billion.
The statement of comprehensive income of PT Al Caisario for the year ended 31 December 2010 shows net income of Rp86 billion comprising income from continuing and discontinued operations, offset by comprehensive loss of Rp14 billion.
Question 3Q=50,000 - (25 * P)FC=2,750,000VC=200/unitTC=FC+VCTVC=VC/unit * # of Units ProducedTC=$2,750,000 + 200QQ=50,000 - (25 * P)25P=50,000-QP=(50,000/25) - (1Q/25)P=2000 - 0.04QTR=P * QTR=(2000 - 0.04Q) * QTR=2000Q-0.04Q2MR=dTR=2000 - 0.08QdQMC=dTC=200dQMR = MC at profit maximizing levelQ2000 - 0.08Q = 200Q0.08Q = 2000 - 200Q0.08Q = 1800Q1800/0.08 = 25,500Q=25,500P=2000 - 0.04QP=2000 - 0.04 (22,500)P=2000 - 900P=$1,100AC=TC/QTC=$2,750,000 + 200 (22,500)TC=$2,750,000 + 4,500,000TC=7,250,000AC=MCAC=$200Profit=TR - TCTR=P * QTR=$1,100 * 22,500TR=24,750,000.00Profit=24,750,000 - 7,250,000Profit=17,500,000====
Question 4Impacts of the ransactions on the major financial statementsStatement of cash flowsCash flows from operating activitiesRevenuesDiscount on goods$ (800,000.00)Total operating cash inflowsCash flows from investing activitiesIncrease in the value ofProperty, Plant, and Equipment$ 2,100,000.00Net flow from other non operating activitiesDecrease in accounts receivable$ (1,500,000.00)Total cash flows $ (200,000.00)Income statementRevenues$ (800,000.00)ExpensesBad debt expense$ 1,500,000.00Gross profit$ (2,300,000.00)Add: Income from non-operating activities$ 2,100,000.00Net income$ (200,000.00)Balance sheetsCurrent assetsLiabilities and stockholders equityCash$ 2,100,000.00Dividends & retained earnings$ 2,100,000.00$ (800,000.00)Less:$ (1,500,000.00)Net change in cash$ 1,300,000.00$ (800,000.00)Accounts receivable$ (1,500,000.00)Change in the Total assets$ (200,000.00)Change in stockholders equity$ (200,000.00)A write-off of an Accounts Receivable amount of $1.5 millionThis reduces the accounts receivable in the balance sheet by $1.5 million.In the income statement, the operating expense (bad debts expense increases by $1.5 million) thus decreasing the net income by the same amount.In the statement of cash flows, the change in the accounts receivable decreases by $1. millionProperty, Plant, and Equipment asset valued at $5 million for cash, which generated a profit of $2.1 million.Cash flow from the sale of property, plant and equipmet increases in the statement of cash flows by $2.1 millionIncome from non operating activities increases by $2.1 million Cash in the balance sheet will increase by $2.1 millionIPS gave a 10% discount to a customerThe revenues in the income statement will decrease by $0.8 millionCash in the balance sheet statement will decrease by $0.8 millionIn the statement of cash flows, the net income will decrease by $0.8 million
AMD Income StatementConsolidated Statements of Operations - USD ($) shares in Millions, $ in Millions12 Months EndedDec. 31, 2016Dec. 26, 2015Dec. 27, 2014Income Statement [Abstract]Net revenue$4,272$3,991$5,506Cost of sales3,2742,9113,667Gross margin9981,0801,839Research and development1,0089471,072Marketing, general and administrative460482604Amortization of acquired intangible assets0314Restructuring and other special charges, net-1012971Licensing gain- ...
- Net revenue for the second quarter of fiscal 2016 was $511 million, down 10% from the previous year. Earnings per share were $0.32 excluding special items, down 3% from the previous year.
- Free cash flow on a trailing twelve month basis was $703 million, up 6% from the previous year and representing 32% of revenue.
- Guidance for the third quarter of fiscal 2016 forecasts revenue between $535-575 million and earnings per share between $0.38-0.44 excluding special items.
1.
Prepare and analize the common statement for Anandam Manufacturing Company. Show all
calculations.
2.
Prepare and analize the cash flow statement for Anandam Manufacturing Company. Show all
calculations.
3.
Calculate the ratios based on case Exhibit 3. Show all calculations. Based on financial analysis
of financial statements, would a loan officer grant a loan to Anandam financial company?
EXHIBIT 3: INDUSTRY AVERAGE OF KEY RATIos Sector Average Ratio 2:301 Current
ratio Acid test ratio (quick ratio) 120 Receivable tunover ratioimes turnover 52 days Receivable
days Inventory turmover ratio Inventory days Long-term detttototal debt Debt-to-equity ratio
Gross profit rato Net profit ratio Retun on equity Retum on total assets 4.85 times 75 days 24%
35% 40% 18% 22% 10% Total asset turnover ratio Ti Fixed asset turnover ratio Current asset
tunover ratio3 interest coverage ratio (tmes 10 nterest earned Warking captal smover ratio Retu
on ed sset
Solution
1….Common -size Income statement 2012-13 % to Total sales 2013-14 % to Total sales
2014-15 % to Total sales Analysis of % to Total sales proportion Sales Cash 200 10.00%
480 10.00% 800 10.00% Credit 1800 90.00% 4320 90.00% 7200 90.00% Total Sales 2000
100.00% 4800 100.00% 8000 100.00% COGS 1240 62.00% 2832 59.00% 4800 60.00%
COGS has reduced in the last 2 yrs. Gross profit 760 38.00% 1968 41.00% 3200 40.00% so,
G/P has increased Operating Expenses: Gen.adm.& sell.exp. 80 4.00% 450 9.38% 1000
12.50% % to sales has doubled in 2013-14 & increased by more than 25% in 2014-15
Depreciation 100 5.00% 400 8.33% 660 8.25% Has increased by 3% in the last 2 yrs.
Int.exp.(on borrowings) 60 3.00% 158 3.29% 340 4.25% Has slightly increased in 2014-15
Profit before tax(PBT) 520 26.00% 960 20.00% 1200 15.00% PBT% has reduced gradually in
both the yrs.due to increase in all operating expenses esp.gen admn.& sell exp. Tax at 30% 156
7.80% 288 6.00% 360 4.50% Decrease % due to decrease in profit % Profit after tax(PAT) 364
18.20% 672 14.00% 840 10.50% PAT% has reduced gradually in both the yrs.due to increase in
all operating expenses esp.gen admn.& sell exp. Common-size Balance
Sheet Assets % to Total % to Total % to Total Fixed assets(net of dep) 1900 74.22%
2500 44.64% 4700 51.33% Assets have decreased to the total Current assets Cash & Cash
equivalents 40 1.56% 100 1.79% 106 1.16% Slight variation in ratio to total Accounts
Receivables 300 11.72% 1500 26.79% 2100 22.94% Has increased in 2013-14 & again
decreased in 2014-15 Inventories 320 12.50% 1500 26.79% 2250 24.57% Has increased in
2013-14 & again decreased in 2014-15 Total 2560 100.00% 5600 100.00% 9156 100.00%
Equity & Liabilities Equity share capital($ 10) 1200 46.88% 1600 28.57% 2000 21.84%
Decreased steadily in all the 2 yrs. Reserves & surplus 364 14.22% 1036 18.50% 1876 20.49%
Increased steadily in both 2 yrs.due to increase in $ net income in those yrs. Long-term
borrowings 736 28.75% 1236 22.07% 2500 27.30% Decreased in 2013-14 & again increased i.
The document summarizes financial results for a company's December 2014 quarter and six months ended March 31, 2014 compared to the prior year periods. Some key highlights include:
- Net sales were in line with an "Upside Forecast" but gross margin improved significantly year-over-year due to cost reductions and improved product mix.
- Operating expenses decreased due to a one-time gain in the prior year but increased due to bonus accruals in the current year.
- The company reported a net loss that increased compared to the prior year periods.
- Cash flow from operations was positive due to changes in working capital but property/equipment purchases used cash.
This document provides instructions and information for an accounting assessment for the Accounting 1B course at the Department of Accountancy. It includes details on the assessment such as the date, time, marks allocation, and instructions that students must follow. The assessment consists of 4 questions covering different accounting topics like provisions, cash flows, profit or loss, and financial position. Each question provides additional context and instructions on what is required. Supporting information is also provided for some of the questions like extracts from trial balances and additional notes.
- Net revenue for the third quarter of fiscal year 2016 was $555 million, down 4% from the previous year. Earnings per share were $0.41 excluding special items, up 3% from the previous year.
- Free cash flow on a trailing twelve month basis was $681 million, or 31% of revenue. The company returned $170 million to shareholders in the form of dividends and share repurchases.
- Guidance for the fourth quarter of fiscal year 2016 forecasts revenue between $555-595 million and earnings per share between $0.45-0.51 excluding special items.
This document provides information about fund flow statements and cash flow statements. It includes sample profit and loss statements and balance sheets. It asks the reader to calculate cash flow from operating activities based on the information provided, and to state how various transactions should be reported in a cash flow statement. It also provides additional financial information and asks the reader to calculate sources and uses of funds or prepare cash flow statements based on the information given.
- Net revenue for the third quarter of fiscal year 2016 was $555 million, down 4% from the previous year. Earnings per share were $0.41 excluding special items, up 3% from the previous year.
- Free cash flow on a trailing twelve month basis was $681 million, or 31% of revenue.
- Guidance for the fourth quarter of fiscal year 2016 forecasts revenue between $555-595 million and earnings per share between $0.45-0.51 excluding special items.
- The company returned $170 million to shareholders in the third quarter through dividends of $86 million and stock repurchases of $84 million.
- Rickmers Maritime reported financial results for the second quarter and first half of 2013, with highlights including successfully raising $80.7 million from a rights issue and paying down $73.7 million in bank loans.
- Charter revenue remained steady at $35 million in Q2 2013, with net profit of $7.7 million, though net profit was down 14% from the same period last year.
- The outlook discusses planned drydockings of vessels through the end of 2014 to satisfy regulatory maintenance requirements, with an extended drydock trial program allowing for longer periods between maintenance.
The document discusses a company that provides infrastructure services including project management, installation, and maintenance for electric utilities, telecommunications providers, and gas and oil companies. It summarizes the company's financial performance from 2015-2019, including revenues increasing from $526 million to $892 million and adjusted EBITDA growing from $525 million to over $900 million. The document also outlines the company's end markets, largest customers, employee count, backlog, and cash flow generation over this period.
- The company reported net revenue of $581 million for the fiscal third quarter of 2017, up 5% from the same quarter last year. Gross margin was 65.2% excluding special items and 63.1% under GAAP. Earnings per share were $0.56 excluding special items and $0.49 under GAAP.
- For the fiscal fourth quarter of 2017, the company expects revenue between $590-630 million, gross margin of 65-67% excluding special items, and earnings per share of $0.59-0.65 excluding special items.
Mr. Khangamwa's taxable income for the 2010 tax year is summarized as follows:
1) His taxable income amounted to K19,636,000 after adding back disallowed expenses like donations and deducting allowed expenses like capital allowances.
2) He has to pay K5,849,400 in income tax but can deduct K1,547,500 in withholding taxes paid, leaving a net tax payable of K4,301,900.
3) Capital allowances claimed for additions to a factory building like fencing and offices are allowed because fencing is deemed protective and the offices expenditure is less than 20% of the total building cost.
This document contains 7 accounting ratio calculation questions involving the preparation of balance sheets and income statements using various financial metrics and ratios provided. It asks the reader to calculate missing values like assets, liabilities, equity, profits, etc. based on ratios for inventory turnover, debtors collection period, current ratio, profit margin, asset turnover, etc. The questions provide real company financial data to practice solving for unknowns.
This document contains 7 accounting ratio calculation questions involving the preparation of balance sheets and income statements using various financial metrics and ratios provided. It asks the reader to calculate missing values like assets, liabilities, equity, profits, etc. based on ratios for inventory turnover, debtors collection period, current ratio, profit margin, asset turnover, etc. The questions provide real company financial data to practice solving for unknowns. The goal is to gain experience using ratios in accounting problems.
working capital ch solution financial management ....mohsin mumtazmianmohsinmumtazshb
The document discusses solutions to problems related to working capital and current asset management. It addresses topics such as cash conversion cycle, economic order quantity, accounts receivable management, and cash management techniques. The problems calculate financial metrics and evaluate strategies for reducing costs and improving profitability within the constraints of various assumptions provided in the questions.
This document provides financial information for a leading online insurance company. It includes a reconciliation of net income to funds from operations (FFO) for several quarters in 2017 and 2016. Some key figures are FFO of $214.6 million for Q3 2017, diluted FFO per share of $1.23 for Q3 2017, and total revenue of $353.9 million for Q3 2017. Metrics like net debt to adjusted EBITDA and fixed charge coverage ratio are also presented.
This chapter discusses key accounting concepts including the income statement, balance sheet, statement of cash flows, and various performance measures. It also covers the calculation of free cash flow and how it is used to determine a firm's intrinsic value. The chapter includes sample financial statements and uses them to illustrate accounting analyses such as evaluating the impact of expansion on assets, liabilities, equity, and cash flows. Key financial metrics like return on invested capital, economic value added, and market value added are also defined and calculated using information from the sample statements. Finally, the chapter reviews features of corporate and individual taxation.
This document discusses drug elimination and pharmacokinetics related to renal elimination. It covers several key points:
1) Drugs are primarily eliminated from the body through the kidneys into urine, but can also be eliminated through other routes like bile, intestine, lungs or milk.
2) Renal elimination involves glomerular filtration, proximal tubular secretion, and distal tubular reabsorption. Drug metabolism can affect reabsorption in the distal tubule by making drugs more ionized.
3) Manipulating urine pH can impact the ionized form and clearance of weak acid or base drugs that are being eliminated renally. For example, alkalinizing urine for a weak acid overdose or acid
The document discusses primary health care (PHC) as outlined at the International Conference on Primary Health Care in 1978 in Alma-Ata. It established the goal of "Health for All" by 2000 and recognized PHC as the key to achieving this. The conference's Declaration of Alma-Ata defined PHC as essential care that is universally accessible, affordable, and participatory. It outlined six principles of PHC - equity, accessibility, acceptability, community participation, appropriate technology, and multi-sectoral collaboration. The document then provides details on each of these principles and how they are implemented in PHC systems.
Word safety microscopy and hand washing AnasAlwadi
1. The document outlines microbiology laboratory safety rules, including proper disposal of contaminated materials, wearing protective clothing, cleaning surfaces before and after use, washing hands, reporting accidents, and following aseptic technique to prevent exposure to pathogens.
2. Microscope use and cleaning procedures are described, noting the basic microscope parts and their functions. Proper techniques like using both hands to carry microscopes and adjusting lenses for focus are emphasized.
3. A hand washing laboratory experiment aims to demonstrate the presence of organisms on hands and nostrils. Students will streak agar plates before and after hand washing with soap/water or alcohol gel, and after drying hands, to compare microbial growth.
The document discusses the structure and mechanism of synaptic transmission at the neuromuscular junction. It describes how acetylcholine is released from the presynaptic neuron into the synaptic cleft upon arrival of an action potential. Acetylcholine then binds to nicotinic receptors on the postsynaptic membrane of muscle fibers, causing depolarization and generation of an action potential in the muscle fiber. Acetylcholine is then broken down by acetylcholinesterase in the synaptic cleft, allowing the muscle membrane to repolarize. The effects of various toxins on this process are also summarized.
The hippocampus is located deep in the brain and plays an important role in memory formation and spatial navigation. It is involved in fear conditioning and damage to the hippocampus has been linked to anxiety disorders like PTSD. The hippocampus contains anxiety cells that respond to unfamiliar places, and suppressing these cells reduces anxiety in mice. CBD may help reduce activity in the amygdala and aid signaling in the endocannabinoid system involving the hippocampus to help treat anxiety symptoms.
The document discusses the major histocompatibility complex (MHC), which controls a major part of the immune system. It defines MHC as a set of cell surface proteins expressed on all nucleated cells and encoded by a large gene family. MHC molecules play a role in antigen presentation, autoimmune diseases, and transplantation. MHC genes in humans are found on chromosome 6 and are divided into three classes - class I expressed on all tissues, class II expressed mainly by antigen presenting cells, and class III encoding complement and TNF proteins. MHC molecules participate in discriminating self from non-self and in both humoral and cell-mediated immunity by presenting antigens.
Practical textbook for communication skillsAnasAlwadi
Shiva introduces himself at a volleyball camp, providing his name, age, where he lives, education details, hobbies, favorite color and food, and his purpose for being at the camp. The document then provides guidance on structuring self-introductions, including topics to cover and examples of introductions for educational and career contexts. Sample self-introductions are also provided to demonstrate the proper format.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive function. Exercise causes chemical changes in the brain that may help protect against mental illness and improve symptoms for those who already suffer from conditions like anxiety and depression.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive functioning. Exercise causes chemical changes in the brain that may help protect against mental illness and improve symptoms.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive function. Exercise causes chemical changes in the brain that may help protect against mental illness and improve symptoms.
This document provides an overview of Chapter 1 from the textbook "Principles of Managerial Finance". The chapter introduces the field of finance and explores career opportunities. It describes different business organizations and the relationship between parties in a corporation. It defines the managerial finance function and differentiates it from economics and accounting. It summarizes the key activities of financial managers as financial analysis and planning, investment decisions, and financing decisions. It discusses the goals of maximizing shareholder wealth and preserving stakeholder wealth through ethics. It also covers the agency problem between managers and owners.
This document contains a series of true/false and multiple choice questions about finance concepts. It covers topics such as the role of managerial finance, legal forms of business organization, and the goal of the firm. Key points addressed include defining finance and the functions of financial managers, describing sole proprietorships, partnerships, and corporations, and explaining why maximizing shareholder value through stock price appreciation is an appropriate goal for businesses. The questions assess understanding of career opportunities in finance, the responsibilities of treasurers and controllers, and factors that influence a firm's stock price.
This document contains a chapter on portfolio selection that includes multiple choice questions, true/false questions, and short answer questions about Markowitz portfolio theory and efficient frontiers. Some key points covered are:
- Markowitz theory assumes investors are risk averse and seek to maximize expected return for a given level of risk. The efficient frontier shows the optimal portfolios that offer the highest return for any level of risk.
- Indifference curves reflect investor preferences, while the efficient set of portfolios represent portfolio possibilities. The optimal portfolio occurs at the point of tangency between the highest indifference curve and the efficient set.
- Asset allocation, or deciding the percentage invested in different asset classes like stocks and bonds, accounts
This document provides answers to questions from final exams for short courses on evaluating financial performance and financial planning and forecasting. It includes 10 multiple choice questions from each course, with explanations for the answers. The key information provided is the calculations and concepts involved in financial ratios, forecasting, budgeting, and capital budgeting analysis such as net present value calculations.
This document contains a series of true/false and multiple choice questions about finance concepts. It covers topics such as the role of managerial finance, legal forms of business organization, and the goal of the firm. Key points addressed include defining finance and the functions of financial managers, describing sole proprietorships, partnerships, and corporations, and explaining why maximizing shareholder value through stock price appreciation is an appropriate goal for businesses. The questions are meant to test understanding of these core introductory finance topics.
1) The document discusses financial markets and institutions. It provides a series of multiple choice questions about topics like financial institutions, markets, and the 2008 financial crisis.
2) Key topics covered include the roles of commercial banks, investment banks, and other financial intermediaries. It also distinguishes between money markets, which involve short term securities, and capital markets, which involve long term securities.
3) The questions discuss the causes of the 2008 financial crisis, including the rise of subprime lending and securitization of mortgages into mortgage-backed securities. This contributed to a housing bubble and crisis when home prices declined.
❼❷⓿❺❻❷❽❷❼❽ Dpboss Kalyan Satta Matka Guessing Matka Result Main Bazar chart Final Matka Satta Matta Matka 143 Kalyan Chart Satta fix Jodi Kalyan Final ank Matka Boss Satta 143 Matka 420 Golden Matka Final Satta Kalyan Penal Chart Dpboss 143 Guessing Kalyan Night Chart
❼❷⓿❺❻❷❽❷❼❽ Dpboss Matka ! Fix Satta Matka ! Matka Result ! Matka Guessing ! Final Matka ! Matka Result ! Dpboss Matka ! Matka Guessing ! Satta Matta Matka 143 ! Kalyan Matka ! Satta Matka Fast Result ! Kalyan Matka Guessing ! Dpboss Matka Guessing ! Satta 143 ! Kalyan Chart ! Kalyan final ! Satta guessing ! Matka tips ! Matka 143 ! India Matka ! Matka 420 ! matka Mumbai ! Satta chart ! Indian Satta ! Satta King ! Satta 143 ! Satta batta ! Satta मटका ! Satta chart ! Matka 143 ! Matka Satta ! India Matka ! Indian Satta Matka ! Final ank
Heart Touching Romantic Love Shayari In English with ImagesShort Good Quotes
Explore our beautiful collection of Romantic Love Shayari in English to express your love. These heartfelt shayaris are perfect for sharing with your loved one. Get the best words to show your love and care.
Boudoir photography, a genre that captures intimate and sensual images of individuals, has experienced significant transformation over the years, particularly in New York City (NYC). Known for its diversity and vibrant arts scene, NYC has been a hub for the evolution of various art forms, including boudoir photography. This article delves into the historical background, cultural significance, technological advancements, and the contemporary landscape of boudoir photography in NYC.
Fashionista Chic Couture Maze & Coloring Adventures is a coloring and activity book filled with many maze games and coloring activities designed to delight and engage young fashion enthusiasts. Each page offers a unique blend of fashion-themed mazes and stylish illustrations to color, inspiring creativity and problem-solving skills in children.
This document announces the winners of the 2024 Youth Poster Contest organized by MATFORCE. It lists the grand prize and age category winners for grades K-6, 7-12, and individual age groups from 5 years old to 18 years old.
2. Fundamentals Level – Skills Module, Paper F7 (UK)
Financial Reporting (United Kingdom) June 2014 Answers
1 (a) Penketh – Consolidated goodwill as at 1 October 2013
$’000 $’000
Controlling interest
Share exchange (90,000 x 1/3 x $4) 120,000
Deferred consideration (90,000 x $1·54/1·1) 126,000
Non-controlling interest (60,000 x $2·50) 150,000
––––––––
396,000
Equity shares 150,000
Pre-acquisition retained profits:
– at 1 April 2013 120,000
– 1 April to 30 September 2013 (80,000 x 6/12) (excluding OCI) 40,000
Fair value adjustments: land 2,000
plant 6,000
customer relationships 5,000 (323,000)
–––––––– ––––––––
Goodwill arising on acquisition 73,000
––––––––
(b) Penketh – Consolidated statement of profit or loss and other comprehensive income for the year ended 31 March 2014
$’000
Revenue (620,000 + (310,000 x 6/12) – 20,000 intra-group sales) 755,000
Cost of sales (w (i)) (457,300)
––––––––
Gross profit 297,700
Distribution costs (40,000 + (20,000 x 6/12)) (50,000)
Administrative expenses (36,000 + (25,000 x 6/12) + (5,000/5 years x 6/12)) (49,000)
Finance costs (2,000 + (4,000 x 6/12) + (126,000 x 10% x 6/12 re deferred consideration)) (10,300)
––––––––
Profit before tax 188,400
Income tax expense (45,000 + (31,000 x 6/12)) (60,500)
––––––––
Profit for the year 127,900
Other comprehensive income
Loss on revaluation of land (2,200 – (3,000 – 2,000) gain for Sphere) (1,200)
––––––––
Total comprehensive income for the year 126,700
––––––––
Profit attributable to:
Owners of the parent 112,700
Non-controlling interest (w (ii)) 15,200
––––––––
127,900
––––––––
Total comprehensive income attributable to:
Owners of the parent 111,100
Non-controlling interest (w (ii)) 15,600
––––––––
126,700
––––––––
Workings (figures in brackets in $’000)
(i) Cost of sales
$’000
Penketh 400,000
Sphere (150,000 x 6/12) 75,000
Intra-group purchases (20,000)
Additional depreciation of plant (6,000/2 years x 6/12) 1,500
Unrealised profit in inventory:
Sales to Sphere (20,000 x 1/5 x 25/125) 800
––––––––
457,300
––––––––
13
3. (ii) Non-controlling interest in profit for the year:
$’000
Sphere’s post-acquisition profit (80,000 x 6/12) 40,000
Less: Additional depreciation of plant (w (i)) (1,500)
Additional amortisation of intangible (5,000/5 years x 6/12) (500) (2,000)
–––––– –––––––
38,000
x 40% =
15,200
–––––––
Non-controlling interest in total comprehensive income:
Non-controlling interest in statement of profit or loss (above) 15,200
Other comprehensive income ((3,000 – 2,000) x 40%) 400
–––––––
15,600
–––––––
(c) Under UK rules goodwill would be based on only the parent’s share of net assets:
Consolidated goodwill as at 1 October 2013
$’000 $’000
Controlling interest
Share exchange (90,000 x 1/3 x $4) 120,000
Deferred consideration (90,000 x $1·54/1·1) 126,000
Non-controlling interest at share of net assets (40% x 323,000 – see below) 129,200
––––––––
375,200
Equity shares 150,000
Pre-acquisition retained profits:
– at 1 April 2013 120,000
– 1 April to 30 September 2013 (80,000 x 6/12) (excluding OCI) 40,000
Fair value adjustments: land 2,000
plant 6,000
customer relationships 5,000 (323,000)
–––––––– ––––––––
Goodwill arising on acquisition 52,200
––––––––
Alternative method of calculation:
Consolidated goodwill as at 1 October 2013
$’000 $’000
Share exchange (90,000 x 1/3 x $4) 120,000
Deferred consideration (90,000 x $1·54/1·1) 126,000
––––––––
246,000
Equity shares 150,000
Pre-acquisition retained profits:
– at 1 April 2013 120,000
– 1 April to 30 September 2013 (80,000 x 6/12) (excluding OCI) 40,000
Fair value adjustments: land 2,000
plant 6,000
customer relationships 5,000
––––––––
323,000 x 60% (193,800)
–––––––– ––––––––
Goodwill arising on acquisition 52,200
––––––––
There is a requirement under UK rules to amortise the goodwill over its estimated life (not known in this case). Thus there
would be an additional charge to the consolidated statement of profit or loss (probably administrative expenses) for six months’
goodwill amortisation.
Tutorial note re statement of financial position: The non-controlling interest would be $20·8 million (73,000 – 52,200)
lower than under IFRS rules being the amount of goodwill attributable to the non-controlling interest.
14
4. 2 (a) Xtol – Statement of profit or loss for the year ended 31 March 2014
$’000
Revenue (490,000 – 20,000 agency sales (w (i))) 470,000
Cost of sales (w (i)) (294,600)
––––––––
Gross profit 175,400
Distribution costs (33,500)
Administrative expenses (36,800)
Other operating income – agency sales 2,000
Finance costs (900 overdraft + 3,676 (w (ii))) (4,576)
––––––––
Profit before tax 102,524
Income tax expense (28,000 + 3,200 + 3,700 (w (iii))) (34,900)
––––––––
Profit for the year 67,624
––––––––
(b) Xtol – Statement of changes in equity for the year ended 31 March 2014
Share Share Equity Retained Total
capital premium option earnings equity
$’000 $’000 $’000 $’000 $’000
Balance at 1 April 2013 40,000 2,600 nil 26,080 68,680
Rights issue (see below) 16,000 22,400 38,400
5% loan note issue (w (ii)) 4,050 4,050
Dividends paid (w (iv)) (10,880) (10,880)
Profit for the year 67,624 67,624
––––––– ––––––– –––––– ––––––– ––––––––
Balance at 31 March 2014 56,000 25,000 4,050 82,824 167,874
––––––– ––––––– –––––– ––––––– ––––––––
The number of shares prior to the 2 for 5 rights issue was 160 million (56,000 x 4 (i.e. 25 cents shares) x 5/7). Therefore
the rights issue was 64 million shares at 60 cents each, giving additional share capital of $16 million (64 million x 25 cents)
and share premium of $22·4 million (64 million x (60 cents – 25 cents)).
(c) Xtol – Statement of financial position as at 31 March 2014
$’000 $’000
Assets
Non-current assets
Property, plant and equipment ((100,000 – 30,000) + (155,500 – 57,500)) 168,000
Current assets
Inventory 61,000
Trade receivables 63,000 124,000
––––––– –––––––––
Total assets 292,000
–––––––––
Equity and liabilities
Equity (see (b) above)
Equity shares of 25 cents each 56,000
Share premium 25,000
Other component of equity – equity option 4,050
Retained earnings 82,824
–––––––––
167,874
Non-current liabilities
Deferred tax 8,300
5% convertible loan note (w (ii)) 47,126 55,426
–––––––
Current liabilities
Trade payables (32,200 + 3,000 re Francais (w (i))) 35,200
Bank overdraft 5,500
Current tax payable 28,000 68,700
––––––– –––––––––
Total equity and liabilities 292,000
–––––––––
(d) Xtol – Basic earnings per share for the year ended 31 March 2014
Profit per statement of profit or loss $67·624 million
Weighted average number of shares (w (v)) 209·7 million
Earnings per share ($67·624m/209·7m) 32·2 cents
15
5. Workings (figures in brackets in $’000)
(i) Cost of sales (including the effect of agency sales on cost of sales and trade payables)
$’000
Cost of sales per question 290,600
Remove agency costs (15,000)
Amortisation of leased property (100,000/20 years) 5,000
Depreciation of plant and equipment ((155,500 – 43,500) x 12½%) 14,000
––––––––
294,600
––––––––
The agency sales should be removed from revenue (debit $20 million) and their ‘cost’ from cost of sales (credit
$15 million). Instead, Xtol should report the commission earned of $2 million (credit) as other operating income (or as
revenue would be acceptable). This leaves a net amount of $3 million ((20,000 – 15,000) – 2,000) owing to Francais
as a trade payable.
(ii) 5% convertible loan note
The convertible loan note is a compound financial instrument having a debt and an equity component which must be
accounted for separately:
Year ended 31 March outflow 8% present value
$’000 $’000
2014 2,500 0·93 2,325
2015 2,500 0·86 2,150
2016 52,500 0·79 41,475
–––––––
Debt component 45,950
Equity component (= balance) 4,050
–––––––
Proceeds of issue 50,000
–––––––
The finance cost for the year will be $3,676,000 (45,950 x 8%) and the carrying amount of the loan as at 31 March
2014 will be $47,126,000 (45,950 + (3,676 – 2,500)).
(iii) Deferred tax
$’000
Provision at 31 March 2014 8,300
Balance at 1 April 2013 (4,600)
––––––
Charge to statement of profit or loss 3,700
––––––
(iv) Dividends
The dividend paid on 30 May 2013 was $6·4 million (4 cents on 160 million shares ($40 million x 4, i.e. 25 cents
shares)) and the dividend paid on 30 November 2013 (after the rights issue) was $4·48 million (2 cents on 224 million
shares (56 million x 4)). Total dividends paid in the year were $10·88 million.
(v) Number of shares outstanding (including the effect of the rights issue)
Theoretical ex-rights fair value:
Shares $ $
Holding (say) 100 1·02 102
Rights issue (2 for 5) 40 0·60 24
–––– –––– ––––
140 126
–––– ––––
Theoretical ex-rights fair value 0·90 ($126/140)
––––
Weighted average number of shares:
1 April 2013 to 31 July 2013 160 million x $1·02/$0·90 x 4/12 = 60·4 million
1 August 2013 to 31 March 2014 224 million x 8/12 = 149·3 million
––––––––––––
Weighted average for year 209·7 million
––––––––––––
16
6. 3 (a) Note: Figures in the calculations of the ratios are in $million
(i) 2014 (ii) 2014 2013
As reported Excluding Shaw From
question
Return on (year-end) capital employed 12·0% 18/(175 – 25) 13·0% (18 – 5)/(150 – 50) 10·5%
Net asset turnover 1·0 times 150/150 1·2 times (150 – 30)/100 1·16 times
Gross profit margin 22·0% 33/150 20·0% (33 – 9)/(150 – 30) 22·0%
Profit before loan interest and tax margin 12·0% 18/150 10·8% (18 – 5)/(150 – 30) 9·1%
Current ratio 1·08:1 27/25 1·67:1
Gearing 36·7% 55/(95 + 55) 5·3%
(b) Analysis of the comparative financial performance and position of Woodbank for the year ended 31 March 2014
Note: References to 2014 and 2013 should be taken as the years ended 31 March 2014 and 2013 respectively.
Introduction
When comparing a company’s current performance and position with the previous year (or years), using trend analysis, it is
necessary to take into account the effect of any circumstances which may create an inconsistency in the comparison. In the
case of Woodbank, the purchase of Shaw is an example of such an inconsistency. 2014’s figures include, for a three-month
period, the operating results of Shaw, and Woodbank’s statement of financial position includes all of Shaw’s net assets
(including goodwill) together with the additional 10% loan notes used to finance the purchase of Shaw. None of these items
were included in the 2013 financial statements. The net assets of Shaw when purchased were $50 million, which represents
one third of Woodbank’s net assets (capital employed) as at 31 March 2014; thus it represents a major investment for
Woodbank and any analysis necessitates careful consideration of its impact.
Profitability
ROCE is considered by many analysts to be the most important profitability ratio. A ROCE of 12·0% in 2014, compared to
10·5% in 2013, represents a creditable 14·3% (12·0 – 10·5)/10·5) improvement in profitability. When ROCE is calculated
excluding the contribution from Shaw, at 13·0%, it shows an even more favourable performance. Although this comparison
(13·0% from 10·5%) is valid, it would seem to imply that the purchase of Shaw has had a detrimental effect on Woodbank’s
ROCE. However, caution is needed when interpreting this information as ROCE compares the return (profit for a period) to
the capital employed (equivalent to net assets at a single point in time). In the case of Woodbank, the statement of profit or
loss only includes three months’ results from Shaw whereas the statement of financial position includes all of Shaw’s net
assets; this is a form of inconsistency. It would be fair to speculate that in future years, when a full year’s results from Shaw
are reported, the ROCE effect of Shaw will be favourable. Indeed, assuming a continuation of Shaw’s current level of
performance, profit in a full year could be $20 million. On an investment of $50 million, this represents a ROCE of 40%
(based on the initial capital employed) which is much higher than Woodbank’s pre-existing business.
The cause of the improvement in ROCE is revealed by consideration of the secondary profitability ratios: asset turnover and
profit margins. For Woodbank this reveals a complicated picture. Woodbank’s results, as reported, show that it is the increase
in the profit before interest and tax margin (12·0% from 9·1%) which is responsible for the improvement in ROCE, as the
asset turnover has actually decreased (1·0 times from 1·16 times) and gross profit is exactly the same in both years (at
22·0%). When the effect of the purchase of Shaw is excluded the position changes; the overall improvement in ROCE (13·0%
from 10·5%) is caused by both an increase in profit margin (at the before interest and tax level, at 10·8% from 9·1%), despite
a fall in gross profit (20·0% from 22·0%) and a very slight improvement in asset turnover (1·2 times from 1·16 times).
Summarising, this means that the purchase of Shaw has improved Woodbank’s overall profit margins, but caused a fall in
asset turnover. Again, as with the ROCE, this is misleading because the calculation of asset turnover only includes three
months’ revenue from Shaw, but all of its net assets; when a full year of Shaw’s results are reported, asset turnover will be
much improved (assuming its three-months performance is continued).
Liquidity
The company’s liquidity position, as measured by the current ratio, has fallen considerably in 2014 and is a cause for
concern. At 1·67:1 in 2013, it was within the acceptable range (normally between 1·5:1 and 2·0:1); however, the 2014
ratio of 1·08:1 is very low, indeed it is more like what would be expected for the quick ratio (acid test). Without needing to
calculate the component ratios of the current ratio (for inventory, receivables and payables), it can be seen from the statements
of financial position that the main causes of the deterioration in the liquidity position are the reduction in the cash (bank)
position and the dramatic increase in trade payables. The bank balance has fallen by $4·5 million (5,000 – 500) and the
trade payables have increased by $8 million.
An analysis of the movement in the retained earnings shows that Woodbank paid a dividend of $5·5 million (10,000 +
10,500 – 15,000) or 6·88 cents per share. It could be argued that during a period of expansion, with demands on cash
flow, dividends could be suspended or heavily curtailed. Had no dividend been paid, the 2014 bank balance would be
$6·0 million and the current ratio would have been 1·3:1 ((27,000 + 5,500):25,000). This would be still on the low side,
but much more reassuring to credit suppliers than the reported ratio of 1·08:1.
Gearing
The company has gone from a position of very modest gearing at 5·3% in 2013 to 36·7% in 2014. This has largely been
caused by the issue of the additional 10% loan notes to finance the purchase of Shaw. Arguably, it might have been better
if some of the finance had been raised from a share issue, but the level of gearing is still acceptable and the financing cost
of 10% should be more than covered by the prospect of future high returns from Shaw, thus benefiting shareholders overall.
17
7. Conclusion
The overall operating performance of Woodbank has improved during the period (although the gross profit margin on sales
other than those made by Shaw has fallen) and this should be even more marked next year when a full year’s results from
Shaw will be reported (assuming that Shaw can maintain its current performance). The changes in the financial position,
particularly liquidity, are less favourable and call into question the current dividend policy. Gearing has increased substantially,
due to the financing of the purchase of Shaw; however, it is still acceptable and has benefited shareholders. It is interesting
to note that of the $50 million purchase price, $30 million of this is represented by goodwill. Although this may seem high,
Shaw is certainly delivering in terms of generating revenue with good profit margins.
4 (a) The requirements of IAS 16 Property, Plant and Equipment may, in part, offer a solution to the director’s concerns. IAS 16
allows (but does not require) entities to revalue their property, plant and equipment to fair value; however, it imposes
conditions where an entity chooses to do this. First, where an item of property, plant and equipment is revalued under the
revaluation model of IAS 16, the whole class of assets to which it belongs must also be revalued. This is to prevent what is
known as ‘cherry picking’ where an entity might only wish to revalue items which have increased in value and leave other
items at their (depreciated) cost. Second, where an item of property, plant and equipment has been revalued, its valuation
(fair value) must be kept up-to-date. In practice, this means that, where the carrying amount of the asset differs significantly
from its fair value, a (new) revaluation should be carried out. Even if there are no significant changes, assets should still be
subject to a revaluation every three to five years.
A revaluation surplus (gain) should be credited to a revaluation surplus (reserve) whereas a revaluation deficit (loss) should
be expensed immediately (assuming, in both cases, no previous revaluation of the asset has taken place). A surplus on one
asset cannot be used to offset a deficit on a different asset (even in the same class of asset).
Subsequent to a revaluation, the asset should be depreciated based on its revalued amount (less any estimated residual value)
over its estimated remaining useful life, which should be reviewed annually irrespective of whether it has been revalued.
An entity may choose to transfer annually an amount of the revaluation surplus relating to a revalued asset to retained
earnings corresponding to the ‘excess’ depreciation caused by an upwards revaluation. Alternatively, it may transfer all of the
relevant surplus at the time of the asset’s disposal.
The effect of this, on Enca’s financial statements, is that its statement of financial position will be strengthened by reflecting
the fair value of its property, plant and equipment. However, the downside (from the director’s perspective) is that the
depreciation charge will actually increase (as it will be based on the higher fair value) and profits will be lower than using the
cost model. Although the director may not be happy with the higher depreciation, it is conceptually correct. The director has
misunderstood the purpose of depreciation; it is not meant to reflect the change (increase in this case) in the value of an
asset, but rather the cost of using up part of the asset’s remaining life.
(b) (i) Delta – Extracts from statement of profit or loss (see workings):
$’000
Year ended 31 March 2013
Plant impairment loss 20,000
Plant depreciation (32,000 + 22,400) 54,400
Year ended 31 March 2014
Loss on sale 8,000
Plant depreciation (32,000 + 26,000) 58,000
(ii) Delta – Extracts from statement of financial position (see workings):
$’000
As at 31 March 2013
Property, plant and equipment (128,000 + 89,600) 217,600
Revaluation surplus
Revaluation of item B (1 April 2012) 32,000
Transfer to retained earnings (32,000/5 years) (6,400)
––––––––
Balance at 31 March 2013 25,600
––––––––
As at 31 March 2014
Property, plant and equipment (item A only) 96,000
Revaluation surplus
Balance at 1 April 2013 25,600
Transfer to retained earnings (asset now sold) (25,600)
–––––––
Balance at 31 March 2014 nil
–––––––
18
8. Workings (figures in brackets in $'000)
Item A Item B
$’000 $’000
Carrying amounts at 31 March 2012 180,000 80,000
Balance = loss to statement of profit or loss (20,000)
––––––––
Balance = gain to revaluation surplus 32,000
––––––––
Revaluation on 1 April 2012 160,000 112,000
Depreciation year ended 31 March 2013 (160,000/5 years) (32,000) (22,400) (112,000/5 years)
–––––––– ––––––––
Carrying amount at 31 March 2013 128,000 89,600
Subsequent expenditure capitalised on 1 April 2013 nil 14,400
–––––––– ––––––––
104,000
Depreciation year ended 31 March 2014 (unchanged) (32,000) (26,000) (104,000/4 years)
–––––––– ––––––––
78,000
Sale proceeds on 31 March 2014 (70,000)
––––––––
Loss on sale (8,000)
––––––––
Carrying amount at 31 March 2014 96,000 nil
–––––––– ––––––––
5 (i) Changing the classification of an item of expense is an example of a change in accounting policy, in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors. Such a change should only be made where it is required
by an IFRS or where it would lead to the information in the financial statements being more reliable and relevant. It may be
that this change does represent an example of the latter, although it is arguable that amortised development costs should
continue to be included in cost of sales as amortisation only occurs when the benefits from the related project(s) come
on-stream. If it is accepted that this change does constitute a change of accounting policy, then the proposed treatment by
the directors is acceptable; however, the comparative results for the year ended 31 March 2013 must be restated as if the
new policy had always been applied (known as retrospective application).
(ii) The two provisions must be calculated on different bases because IAS 37 Provisions, Contingent Liabilities and Contingent
Assets distinguishes between a single obligation (the court case) and a large population of items (the product warranty
claims).
For the court case the most probable single likely outcome is normally considered to be the best estimate of the liability, i.e.
$4 million. This is particularly the case as the possible outcomes are either side of this amount. The $4 million will be an
expense for the year ended 31 March 2014 and recognised as a provision.
The provision for the product warranty claims should be calculated on an expected value basis at $3·4 million (((75% x nil)
+ (20% x $25) + (10% x $120)) x 200,000 units). This will also be an expense for the year ended 31 March 2014 and
recognised as a current liability (it is a one-year warranty scheme) in the statement of financial position as at 31 March 2014.
(iii) Government grants related to non-current assets should be credited to the statement of profit or loss over the life of the asset
to which they relate, not in accordance with the schedule of any potential repayment. The directors’ proposed treatment is
implying that the government grant is a liability which decreases over four years. This is not correct as there would only be
a liability if the directors intended to sell the related plant, which they do not. Thus in the year ended 31 March 2014,
$800,000 (8 million/10 years) should be credited to the statement of profit or loss and $7·2 million should be shown as
deferred income ($800,000 current and $6·4 million non-current) in the statement of financial position.
19
9. Fundamentals Level – Skills Module, Paper F7 (UK)
Financial Reporting (United Kingdom) June 2014 Marking Scheme
This marking scheme is given as a guide in the context of the suggested answers. Scope is given to markers to award marks for
alternative approaches to a question, including relevant comment, and where well-reasoned conclusions are provided. This is
particularly the case for written answers where there may be more than one acceptable solution.
Marks
1 (a) consolidated goodwill 6
(b) Consolidated statement of profit or loss and other comprehensive income
revenue 2
cost of sales 4
distribution costs ½
administrative expenses 1½
finance costs 1½
income tax expense 1
other comprehensive income 1½
non-controlling interest in profit for year 2
non-controlling interest in other comprehensive income 1
15
(c) revised calculation of goodwill 3
goodwill requires amortisation 1
4
Total for question 25
2 (a) Statement of profit or loss
revenue 1
cost of sales 2
distribution costs ½
administrative expenses ½
operating income agency sales 1
finance costs 1½
income tax expense 1½
8
(b) Statement of changes in equity
balances b/f 2
rights issue 1
5% loan note: equity component 1
dividends paid 1½
profit for the year ½
6
(c) Statement of financial position
property, plant and equipment 1½
inventory ½
trade receivables ½
deferred tax 1
5% loan note 1½
trade payables 1½
bank overdraft ½
current tax 1
8
(d) Basic earnings per share
theoretical ex-rights fair value 1
calculation of weighted average number of shares 1½
calculation of EPS using profit per statement of profit or loss ½
3
Total for question 25
21
10. Marks
3 (a) (i) and (ii) 1 mark per ratio 10
(b) 1 mark per relevant point to maximum 15
Total for question 25
4 (a) 1 mark per valid point maximum 5
(b) (i) Statement of profit or loss extracts
year ended 31 March 2013 3
year ended 31 March 2014 2
5
(ii) Statement of financial position extracts
as at 31 March 2013 3
as at 31 March 2014 2
5
Total for question 15
5 (i) changing expense classification is an example of a change in accounting policy 1
must be required by IFRS or improve reliability/relevance 1
discuss and conclude that the proposed treatment may be permitted 1
if change must restate previous year’s financial statements 1
maximum 3
(ii) provision for damages at $4 million 2
provision for product warranty claim at $3·4 million 2
4
(iii) government grant is not a liability (do not use repayment schedule) 1
government grant credited over life of the asset at $800,000 per annum 1
$7·2 million deferred income in statement of financial position 1
3
Total for question 10
22