1. Some examples of UK, US and IASB terms UKUSIASB StockInventory SharesStockShares Own sharesTreasury stockTreasure shares debtorsreceivablesReceivables creditorspayables turnoverSales (or revenue) acquisitionPurchaseAcquisition Fixed assetsNon-current assets Profit and loss accountIncome statement

2. Focus areas 1. Profit & Loss Account Balance Sheet 2. Statement of Cash Flows (IAS 7)- Section B (Answer any Two Questions)

3. Focus areas 3. Ratios (Especially Profitability and Liquidity Ratios) 4. Group Accounting (Preparation of consolidated Financial Position) 5. IFRS (Theory like objectives, role, advantages, purposes of IFRS) 6. Cost Volume profit Analysis (Calculating contribution margin or PV ratio, Breakeven Point) Theory on CVP Analysis (Like Assumptions, importance of CVP Analysis)

4. One more example DrCr Sales12,050 Return outwards313 Provision for depreciation: Plant738 Vehicles375 Rent receivable100 Trade payables738 Debentures250 Issued share capital – ordinary $1 shares 3,125

5. One more example DrCr Issued share capital – preference shares 625 Share premium350 Retained earnings875 Inventory825 Purchases6,253 Return inwards350 Carriage inwards13 Carriage outwards125 Salesmen’s salaries800

6. One more example DrCr Administrative wages and salaries 738 Land100 Plant (includes $362,000 acquired in 2001 ) 1,562 Motor vehicles1,125 Goodwill1,062 Distribution cost290 Administrative expenses286 Directors’ remuneration375 Trade receivables3,875 Cash at bank and at hand1,750 19,539

7. Notes: Provide for: An audit fee of 38,000 Depreciation of plant at 20% straight line Depreciation of vehicles at 25% reducing balance. The goodwill suffered an impairment in the of $ 177,000 Income tax of 562,000 Debenture interest of $25,000

8. Closing inventory – 1,125,000 Administrative expenses were prepaid by 12,000 Land was revalued by 50,000

9. required Sales 12,050 Less: returns 350 11,700 Inventory at 1.1. 20X1 825 Purchases 6,263 Carriage inwards 13 Less: returns (313) 6,788 Inventory at 31.12.20X1 1,125 5,663 Add: Depreciation of plant 313 5,976 Gross profit 5,724

10. Administration: Wages 738 Administration expenses (286 − 12) 274 Directors’ remuneration 375

11. Selling: Salesmen’s salaries 800 Distribution: Distribution expenses 290 Depreciation of vehicles 187 Carriage 125

12. Financial: Goodwill impairment 177 Audit fee 38 Debenture interest 25 Rent receivable (100) 2,929

13. Profit before Tax 2,795 Tax 562 Profit for year 2,233

14. Non-current assets Intangible assets (1,062 − 177) 885 Property, plant and equipment 1,074 Land 150

15. Current assets Inventories 1,125 Receivables 3,875 Cash at bank and in hand 1,750 Prepayments 12 6,762

16. Current liabilities Payables 738 Provision for income tax 562 Accrued charges 63 1,363

17. Net current assets 5,399 Total assets less current liabilities 7,508 Non-current liabilities Debentures 250 7,258

18. Equity Ordinary shares of €1 each 3,125 Preference shares of €1 each 625 Share premium 350 Retained earnings 3,158 7,258

19. Property, plant and equipment Plant M. V. Total At 1.1.20X1 1,200 1,125 2,325 Additions 362 Disposals At 31.12.20X1 1,562 1,125 2,687

20. Accumulated depreciation At 1.1.20X1 738 375 1,113 Charge for year 313 187 500 At 31.12.20X1 1,051 562 1,613

21. Net book value At 31.12.20X1 511 563 1,074 At 31.12.20X0 824 750 1,574