Fa 116

Financial reporting
1 Recording
2 Summarysing
3 Analysing
Types of business
Sole trader
Benefits Disadvantages
All the losses

All the profit is in are carried by
hand of one person one person
Its dificult to
Tax benefits rise finance
Its easier to Long working
establish
No need forcompany
audit, hours
published FSs
Can be flixible
1
2
3
4
5
1
2
3
Partnership Limited Liability Company
Benefits Disadvantages Benefits
Its is easire for
parnters to rise The shareholders
finance then for ST are only liable for
Sharing the profit their investment
Costs assosiated
Jobs are allocated with setting
between partners partmership
agreement Its easier to rise finance
No need for audit, Slower decision
published FSs making Separate legal entity
Sharing risks Transfer shares
Financial accounting Management accounting (cost accounting)

F3 (FA) F2 (MA)
Historical data Historical---firecast data
Stakeholders
External Internal Connected
Potential
Employees Tax authorities
shareholders
Shareholders Management Government
Customers
Suppliers
IAS International Accounting standards

IFRS International Financial reporting standards
Governance
Chairman (NED)
Excecutive directors Non-excecutive (NED)
CFO
CEO
CEA
Responsibilities
1 Acting in best interest of shareholders
2 Preparation of FS
3 Building the controls within the company
4 Prevention and detection of fraud
Elements of financial statement
Income statement (Statement of profit or loss and other comprehensiv income)
Balans sheet (Statement of financial position)
Change in equity (Statement of change in equity)
Cash flow statement
Disclouser notes
Income statement (Statement of profit or loss and other comprehensiv income)

Revenue
Expenses
Balans sheet (Statement of financial position)

Assets
Liabilities
Equity
Change in equity (Statement of change in equity)
Assets = Liability + Equity (Capital)

Control Past event
Reliable estimate Reliable estimate
Future econmic benefits Future econmic losses
Liability to 3rd party Liability to shareholders
Disadvantages
Need for audit,

published FSs
Legal and accounting

requirements
Share issue is
regulated by law
unting (cost accounting)
Non-excecutive (NED)
IFRS Foundation
Oversee
IASB (International accounting standards board)
IFRS Advisory Councile IFRS interpretation committee

outside worlds Insights to IFRS
Accounting standars
Law based Principle based

GAAP (USA, Canada) IFRS
Flexibility Not flexible at all More flexible
Underlying assumption: Going concern
Going Break-up
Balance sheet concern basis
Receivables 20,000 4,000
Inventory 300,000 150,000
Cash 350,000 350,000
Total assets 670,000
Trade payables 500,000 750000
Equity 170,000
Total equity + liability 670,000
Accrual basis
Payables
Receivables
Maching principle
Revenue 200
COGs 100
Net 100
Characteristics of financial information
Fundamental Enhancing
1 Relevence Comparability
2 Faithful represenation Verifiability
Timeliness
Undertandability
Relevance Consistency
Materiality concept Accuracy
1-2% Revenue, expenses, assets
Faithful represenation << not bias

Complete, neutral and free from material errors
Subtance over form
The shareholder gave company 1million AZN with interest rate of 10% and maturity of 5 years.
Business entity concept

Business is separate legal entity
Corporate governance
Princeple-ag Chairman
Should be independend
Excecutive directors Non-excecutive directors
CFO
CEO Remunaration Committee
Nomination committee
Methods
Accrual Cash basis

metod nacislenniya kassoviy metod
<<Tax accounting
<<small companies
We sold the product in 1st March 2021 by credit, the payment will be after 30 days.
Accrual Cash
1-Mar-21 1-Mar-21
Dr. Receivables 100
Cr. Revenue 100
31-Mar 31-Mar
Dr. Cash 100 Dr.
Cr. Receivables 100 Cr.
We sold the product in 1st March 2021 with cash

1-Mar-21
Dr. Cash 100
Cr. Revenue 100
Liability Assets
1 Past event 1 Control
2 Reliable estimate 2 Reliable estimate
3 Economic outflow 3 Economic inflow
IAS
IFRS
<<More assumptions
<<New IFRS, more fair presention
<<<Liability
xcecutive directors
Audit Committee
ation committee
he payment will be after 30 days.
Cash 100
Revenue 100
`
Documents
1 Quotation <<< Price list
2 Contract
3 Purchase order <<<by customer to suplier (Dell)
4 Sales order <<zakaz
5 Good dispched notes (GDN) <<sent by supplier to customer
6 Good received note <<sent by cutomer to supplier
7 Invoice <<<supplier to customer
8 Credit note << "negative invoice" Supllier to customer (supplier noticed overpayment)
9 Debit note <<<customer to supplier
10 Statement << akt sverki (uzleshme akti)
11 Remittance advice <<uvedomlenniye ob oplate (otpravlennoye postavshiku)
12 Receipt
Invoice:
Date:
Serial N of invoivce
Books or prime entries

1 Sales day book <<all credit sales
2 Purchase day book <<all purchases on credit
3 Cash book <<all cash inflow and outflows
4 Sales return day book <<Vozvrati credit pokupok nam
5 Purchase return day book <<Vozvrati credit pokupok nami
6 Journal
What is petty cash?

imperest system
Limit 1,500
January 1,500
Cash-outflow 800
Closing balance 700
February 1,500
d overpayment)
ASSETS = LIABILITIES + EQUITY
Dr.
Cr.
Revenue - Expe= Net proft
Dr.
Cr.
1 Liza put into the Company 2,500 USD

2-Jul
Dr. Cash 2,500
Cr. Share capital 2,500

Cash 2,500 Share capital 2,500
Total 2,500 0 2,500
Dr. Stall 1800

Cr. Cash 1800
Dr Flowers (inventory) 650

Cr. Cash 650
ASSETS = LIABILITIES + EQUITY 0

Cash 50 Share capital 2,500
Stall 1800
Flowers (inventory) 650
2,500 2,500
3-Jul Sold all inventory for 900

Dr. Cash 900
Cr. Sales 900
Dr. COGS 650

Cr. Inventory 650

Stall 1800 Retained earni 250
Total assets 2,750 2,750
Dr. Drawings 180 <<<negative equity

Cr. Cash 180

Cash 770 Share capital 2500
Total assets 2,570 2570
Purchased flowers for cash

10-Jul Dr Flowers (inventory) 740
Cr. Cash 740

Total assets 2,570 2,570
Sold all inventory for 1100
Dr Cash 1,100
Cr. Sales 1,100 Revenue
COGS
Dr COGS 740 Salary expens
Cr. Flowers (inventory) 740 NP
Salary paid to Ethel

Dr Salary expenses 40
Cr. Cash 40
Cash taken by Liza

Dr Drawing 200
Cr. Cash 200

2,690 2,690
A Dr Inventory 800
Cr Payable 800
Dr Telephone expenses 25
B Cr Cash 25
Dr Cash 650
C Cr Sales 650
Dr COGS 450
Cr Inventory 450
D Dr Purchases 800
Cr Cash 800
Susbtance over form
Sales 900
COGS 650
NP 250
1,100
740
40
320
1 Dr. Cash 2,000
Cr. Share capit 2,000
2 Dr. Inventory 4,300

Cr. Payables 4,300
3 Dr. Payables 3,600

Cr. Cash 3,600
4 Dr. Receivable 5,800

Cr. Sales 5,800
5 Dr. Cash 3,200

Cr. Receivable 3,200
6 Dr Non-curren 1,500
Cr. Cash 1,500
Dr Expenses 900
Cr. Cash 900
Income
Revenue 5,800
Expenses -900
Net profit 4,900
Example 1.5 Page 93
30-Mar-17 Dr Cr
Bank loan 12,000
Cash at bank 11,700
Capital 13,000
Local business taxes expenses 1,880 IS
Payables 11,200
Purchases 12,400
Sales 14,600 IS
Sundry payable 1,620
Receivables 12,000
Loan interest 1,400 IS
Other expenses 11,020 IS
Vechiles 2,020
52,420 52,420
Double entries for 31 March 2017
a. Dr. Purchases 1,000

Cr. Cash 500
Cr. Payables 500
b. Dr. Cash 240

Dr. Receivables 800
Cr. Sales 1,040
c. Dr. Wage expenses 260

Cr. Cash 260
DR CR
Assets = Liability +
Cash -800 Payables 700
Inventory 4,300
Receivables 2,600
Non-current asset 1,500
7,600 700
Miy
Dr Cash 500
Cr Revenue 500
Dr Revenue 500
Cr Cash 500
Customer
Dr. Service ex 500
Cr. Cash 500
Dr. Cash 500

Cr. Service ex 500
Closing net assets = Opening
Closing net assets - Opening
31-Mar-17 Dr Cr 1 Statement of profit or loss/Income

Bank loan 12,000 Revenue
Cash at bank 11,180 Expenses
Capital 13,000 NP
Local business taxes expenses 1880
Payables 11,700
Purchases 13,400 2 Statement of financial postion/Bala
Sales 15,640 Assets
Sundry payable 1,620 11,180
Loan interest expenses 1,400 12,800
Other expenses 11,280 2,020
Vechiles 2,020 39,400
53,960 53,960 -
CR
Equity
Share capital 2,000
Retained earn 4,900
6,900
Cash 0
Revenue 0
+ Profit "- Drawings
+ Drawings = Profit
Statement of profit or loss/Incomestatement

15,640
14,560
1,080
Statement of financial postion/Balace sheet

= Liability + Equity
12,000 13,000
11,700 1,080
1,620
= 25,320 + 14,080
39,400 -
2004
Opening inventory + Purchase- COGS
0 60,000 40,000
Raw materials 20,000

Work in progress Revenue 100,000
Finished goods COGS 40,000
GP 60,000
2005
20,000 + 95,000 - X
Revenue 230,000
COGS = 103,000
GP 127,000

6,000 50,000 X
Revenue 80,000
COGS 43,500
GP 36,500
1C
Floor 200
Cost of inventory
Raw material Dr. Write-down expense
Carriage inward Cr. Inventory
Cutoms duties
Amortization production assets
Production staff
Other expenses
Marketing expenses
Salary of admin and marketing staff
Carriage outwards
Amortization of ther assets
Dr. Cash 2,000

Dr. Inventory 4,300
Cr. Payables 4,300
Dr. Payables 3,600

Cr. Cash 3,600
Dr. Receivables 4,000

Cr. Sales 4,000
Dr. COGS 2,500

Cr. Inventory 2,500
Dr Cash 3,200
Cr Receivables 3,200
Dr Asset 1,500
Cr Cash 1,500
Dr Expenses 900
Cr Cash 900
Opening inventory + Purchases - COGS =

0 4,300
COGS 2,500
COST
FIFO LIFO
First in First out Last in First out
Unit Cost per unit
Opening 100 2 Opening
Receipt 1 400 2.1 Receipt 1
Total 900 Total
Issue 700 Issue
Closing 200 452 Closing
3 Main criterias of asset

1 Control
2 Future economic benefits
3 Reliable estimate
IAS 2 Inventory
31-Dec Cost NRV Diff
Roses 2,000 1,000 1,000
Dr. Write-down expenses 1,000

Cr. Inventory 1,000
31-Dec Cost
Roses 1,000
The inventory should be valued at LOWER of cost or NRV
Cost NRV
Furniture 1,000,000 2,000,000
Roses 987,690 500,000
Fashionable goods 987,656 100,000
NRV Net Realisable value =

A B C
Cost 20 9 12
Price 30 12 22
Modification 0 2 8
Marketing 7 2 2
NRV 23 8 12
Number of units held 200 150 300

Base 20 8 12
Closing IFRS 4000 1200 3600 8,800
Closing 4000 1350 3600 8,950
= Closing inventory
20,000
5 2 3
= Closing inventory
= 12,000
= Closing inventory
12,500
= Reality 1C = Reality
160 160 160
Write-down expenses 40
Inventory 40
Opening Dr Turnover Cr Turnover Closing Dr

Cash - 5,200 6,000
Share capital - - 2,000
Inventory - 4,300 2,500 1,800
Payables - 3,600 4,300
Receivables - 4,000 3,200 800
Sales - - 4,000
Asset - 1,500 - 1,500
Expenses - 900 - 900
COGS - 2,500 - 2,500
- 22,000 22,000 7,500
Sales
COGS
Gross profit
Expenses
Net profit
Closing inventory
1,800
AVCO
Last in First out Average cost method
Periodic
100 2 Unit Cost per
400 2.1 Opening 100 2
300 2.12 Receipt 1 400 2.1
100 2.4 Receipt 2 300 2.12
900 Receipt 3 100 2.4
Total 900 2.13
700
Issue 700 2.13
200 410
Closing 200 2.13
Closing inventory
1,000,000
500,000
100,000
Future price - Future cost to sell

Unit Cost per unit
Buy 1 10 300
Buy 2 12 250
Buy 3 6 200
28
Sell 20
Buy 1 10 300
Buy 2 10 250
Cost
Closings Unit per unit
Buy 2 2 250
Buy 3 6 200
Closing inventory 8
Formula 8
Closing Dr Closing CR
800
2,000
700
4,000
7,500
Continius
Total Unit Cost per Total
200 Opening 100 2 200
840 Receipt 1 400 2.1 840
636 500 2.08 1040
240
1916 Issues 1 200 2.08
Remaining 300 2.08 624
Receipt 2 300 2.12 636
425.78 600 2.1 1260
Issues 2 400 2.1
Remaining 2 200 2.1 420

Receipt 3 100 2.4 240
300 2.2 660
Issues 3 100 2.2
Closing 200 2.2 440

Cost per unit Revenue 8,000
3000 COGS 5,500
3000 Gross profit 2,500
1200
7200
COGS
3000
2500
5500
Total
500
1200
1700
1700
1 Dr. Cash 2,000 C
Cr. Share capital 2,000 b/d
Share capital
2 Dr. Purchases 4,300 Receivables
Cr. Payables 4,300
c/d
3 Dr. Payables 3,600
Cr. Cash 3,600
4 Dr. Receivables 5,800 Pur

Cr. Sales 5,800 b/d
Payables
5 Dr. Cash 3,200
Cr. Receivables 3,200
6 Dr. Asset 1,500
Cr. Cash 1,500
7 Dr. Other expenses 900 S

Cr. Cash 900
c/d
Ex
b/d
Other expenses
Cash Share capital
0
Share capital 2,000 3,600 Payables
Receivables 3,200 1,500 Asset
900 Other expenses
800 c/d 2,000
6000 6000 2000
Purchases Payables
0
Payables 4,300 Cash 3,600
4,300 c/d c/d 700

4300 4300 4300
Sales Aseet
0 b/d b/d 0
5,800 Receivables Cash 1,500
5,800
5800 5800 1500
Expenses Receivables
0 b/d
Other expenses 900 Sales
900 c/d
900 900
Dr Cr
Share capital Dr Ovedraft 800
0 b/d Cr Share capital 2,000
2,000 Cash Dr Purchases 4,300
Cr Payables 700
Dr Receivables 2,600
Cr Sales 5,800
2000 Dr Asset 1,500
Dr Other expense 900
Total 9,300 9,300
Payables
0 b/d
4,300 Purchases
4300
Aseet
1,500 c/d
1500
Receivables
0
5,800 3,200 Cash
2,600 c/d
5800 5800
Balance sheet ( Statement of financial position)
Aktivniy (DR)
Assets =
Criteria's for recognizing assets

1 Control 1
2 Future economic benefits will flow to the entity 2
3 Can be estimated reliably 3
Current assets Non-current assets

1 Cash and cash equivalents Property, plant, equipment
2 Receivables Land
3 Prepayments Intangible assets
4 Inventory Prepayments
5 Short-term deposit
6 Intangible assets
Sales (Revenue) Passivniye (Cr)

Expenses Aktivniy (DR)
Drawings Aktivniy (DR)
ment of financial position)
Passivniye (Cr)
Liability + Equity
Criteria's for recognizing assets Share capital

Past event according which we have liability Reatined Earnings
Future economic benefits will outflow from the entity Share premuim
Can be estimated reliably Revaluation surplus
Current liability Non-current liability

Tax payables Borrowing (loan) for 36 months
Employees payables Advances received
Trade payables
Loan payables for 9 months
Advances received
Authorised capital
1 USD, 1,000,000
Nominal value (Par value) 1 USD
Issued
1 USD, 200,000 Market value
Called-up Dr.
1 USD, 100,000 Cr.
Cr.
Paid-up
1 USD, 100,000
Shares
Ordinary
Right to vote
Divdends
Equity
Redemebale
100 USD, 7%
3 years
100
-7
-7
-107
Liability
2.4 Example
Net ptofit 8,400

Dividents to preference sharehol (1,400)
Ordinary dividends (3,500)
Total shares 50,000

Divident per unit of share (0.07)
Reserves <Equity
Dr. RE
Cr. Reserves
Ordinary shares
Normal share Right issue
Dr. Cash Dr. Cash

Cr. Share capital Cr. Share capital
Cr. Share premium Cr. Share premium
Openning Closing
Ordinary shares 200,000 400,000
Share premium 70,000 50,000
RE 230,000 200,000
500,000 650,000 -150,000
1 for 2
Number of shares 200,000
Bonus issue
Dr. Share premium 70,000
Dr. RE 30,000
Right issue, 1 for 3, 0.75c

Right issue 200,000
Dr. Cash 150,000

Cr. Share premium 50,000
1 USD
Market value 5 USD
Cash 5
Capital 1 <Equity
Share premium 4 <Equity
Preference shares, 7%
No voting right
Stable dividends
Irredimible preference shares

100 USD, 2%
100
2
2
2
2
2
2
Equity
Bonus nominal
Dr Share premium
Cr. Share capital
hare premium
1 Error of tranposition
The Company received Invoice amounting 289 AZN

Dr. Purchase 298
Cr. Payables 298
Dr. Purchase 298

Cr. Payables 289
2 Error of omission
The Company received Invoice amounting 289 AZN
Dr. Purchase 298
3 Error of principle
The company purchased reasearch papaper for 20,000 AZN
Dr. Intangible asset 20,000

Cr. Cash 20,000
4 Error of commission
The cpompany received electricity bill for 20 AZN
Dr. Gas expenses 20
Cr. Payables 20
SUSPENSE
Dr. Cash 30,000

Cr. Suspense 30,000
Dr. Suspense 30,000

Cr. Capital 30,000
Question
Trial balance Dr Cr.
Suspense 1,040
Total 11,040 10,000 1,040
1 Correct What accountant did

Dr. Receivables 1,000 Dr. Receivables 1,000
Cr. Sales 1,000 Cr. Suspence 1,000
Dr. Plant 240 Dr. COGS 240

Cr. Cash 240 Cr. Cash 240
Dr. Payables JW
Cr. Discount received
Dr. Inventory 350 Dr. Inventory 850

Cr. Cash 350 Cr. Cash 350
Cr. Suspense 500
Dr. Cash 230 Cr. Purchase retu 230

Cr. Payables 230 Cr. Payables 230
Dr. Suspense 460
Dr. Purchases 1000 1,040

Cr. Payables 1000
Dr. Payables 1230

Cr. Cash 1230
Dr
Cash at bank 200
Petty cash 500

Share capital
Purchases 4300
Payables
Receivables 2600
Sales
Asset 1500
Other expenses 900
Total 10,000
Suspense
1,040
1000
500 460
1,500 1,500
Correction
Dr. Suspence 1000
Cr. Sales 1,000
Dr. Plant 240

Cr. COGS 240
Dr. Discount received

Cr. Payables JW
Dr. Suspense 500

Cr. Inventory 500
Dr. Cash 230

Dr. Purchase return 230
Cr. Suspense 460
Cr
3500
700
5800
10,000
1-Jun-06 1-Jun-08 31-May-09
Cost 75,000 75,000 75,000
Residual 5,000 3,000
Acc dep. 14,000
Dep. Charge 11,600
CA 61,000
34 Inventory
22,000
86,000 92,000
16,000
COGS 92,000
Gross profit Revenue - COGS
Revenue Revenue
18
Petty cash 88
Sugar -10
Taxi -12
Staff 9
Purchase -20
55
15 Cost Dep. Exp

Prchase date 1-Nov-08 2008 60,000 2000
Cost 60,000 2009 60,000 11600
Residual 10,000 2010 60,000 9280
Depreciation (reducin 20% 2011 60,000 1,237
Sale date 1-Mar-11

Cash 25,000
CA 35,883
Loss on diposal 10,883
13
Prchase date 1-Aug-07 CA Revalued amount
Cost 130,000 120,000 135,000
Residual 30,000
Depreciation 40
ACC dep 10,000
Old 2500
New 2,917
Excess depreciation 417
11
Units Unit cos Privce Expense Expense per unit
A 120 50 63 550 4.6
b 85 80 99 820 9.6
c 94 65 70 705 7.5
T 299 195 232 2075 6.9
Carrying
Cost amount
1-Nov-16 1-Nov-19
Land 75,000 75,000
Building 175,000 161,875
250,000 236,875
Acc dep. 13,125

161,875
49,400 37,800 26,200 14,600 3,000
COGS
1- Revenue
Acc dep. CA
2000 58,000
13600 46,400
22880 37,120
24117.33 35,883
Revaluation surplus
31-Jul-11 31-Jul-12
15,000 14,583
NRV Calculation
58.42 50 6,000
89.35 80 6,800
62.50 62.5 5,875
210.27 18,675
Revaluation
Revalued amount
surplus
140,000 65,000
360,000 198,125
500,000 263,125
Payables invoice
Accruals liability without invoice
Provision liability of uncertian time or amount
Contingent liabilities its possible liability of uncertian time or amount
Provision
Dr. Expenses
Cr. Provision
1.3 Example
31-Dec-07
Dr. Expenses 10,000
Cr. Provision 10,000
31-Dec-08
Dr. Expenses 40,000

31-Dec-09
Dr. Provision 50,000

Cr. Cash 50,000
Liability
1 Past event, future obligion
2 Reliable estimate
3 Future economic loss
Warranty provision
% Cost of repair
75% 0
20% 1
5% 4
Probable
Remote (>10%) Possible (10-49%)
(50-90%)
Provision n/a Contingent liability Recognise provision
Contingent liability n/a Disclose Provision
Contingent assets n/a n/a Disclose
time or amount
0
0.2
0.2
0.4
Virtually certain
(90%-100%)
ecognise provision Payable
Payable
Recognise contingent asset
Research and development
Study action
Expenses
P Probable Expense
I Intention
R Resources
A Ability
T Technology
E Expenditure (reliable estimate)
Capitalise
Payables
60,000
302,800 X
2,960
2,000
84,000
X 331,760
6 Current assets Current liabilites

Receivables 12,000
Interest receivbles 240
Prepayment 6,000
Receivables from t 4,000
1 Sep. 2005 22,240
Dr. Prepayment 9,000

Cr. Cash 9,000 Dr. Cash Cr. Cash
Cr. Receivables Cr. Receivables
31 Sep
Dr. Insurance expenses 750 Dr. Cash Dr. Cash
Cr. Prepayment 750 Cr. Recievables Dr. Recievables
Receivables
Recievables
Recording
ASSSETS Liza invested 2,500 cash into the Company
EXPENSES DR Dr. Cash
Cr. Share capital
LIBILITY Liza purchased stall by cash 1,800

EQUITY CR Dr. Stall
REVENUE Cr. Cash
Liza purchased flowers by cash 650

Dr. Flowers
Cr. Cash
Liza sold all her flowers for 900 cash

Dr. Cash
Cr. Sales
Dr. COGS
Cr. Flowers
Sales
COGS
NP
Liza pays herself 180 cash

Dr. Drawings (Dividends)
Cr. Cash
Liza purchased flowers by cash 740

Dr. Flowers
Cr. Cash
Liza sold all her flowers for 1100 cash

Dr. Cash
Cr. Sales
Dr. COGS
Cr. Flowers
Liza gave Ethel 40 cash

Dr. Wages salaries expenses
Cr. Cash
Sales
COGS
Wages salaries expenses
NP
Liza pays herself 200 cash
Dr. Drawings
Cr. Cash
` Liza invested 250 cash into the Company

Dr. Cash
Cr. Share capital
Uncle Henry gives Liza 500 cash

Dr. Cash
Cr. Payable to uncle
She purchase van on credit 700
Dr. Van
Cr. Car payable
Liza purchased gmom with cash 300
Dr. Gnom
Cr. Cash
Dr. Receivables
Cr. Sales
Dr. COGS
Cr. Gnom
Liza buys flowers costing 800, 750 paid, 50 in cred
Dr. Flowers
Cr. Cash
Cr. Payable
Liza sold all her flowers for 1250

Dr. Cash
Cr. Sales
Dr. COGS
Cr. Flowers
Dr. Drawings
Cr. Cash
Dr. Salary expenses

Cr. Cash
Dr. Interest expenses
Cr. Interest payables
Sales
COGS
Salary expenses
Interest expenses
NP
Summarysing
into the Company Assets = Liability + Equity
2,500 BS Cash 770 Share capital 2,500
2,500 BS Stall 1,800 Retained earnin 70
Flowers 0
2,570 0 2,570
1,800 BS
1,800 BS
650 BS
650 BS Assets = Liability + Equity
for 900 cash Stall 1800 Retained earnin 190
900 BS Flowers 0
900 IS 2,690 2,690
650 IS
650 BS
900
650
250
180 <<<-RE
180
740 BS
740 BS
for 1100 cash

1100
1100
740
740
40
40
1100
740
40
320
200
200
nto the Company Assets = Liability +

250 Cash 1,560 Car payable 700
250 Stall 1800 Payable to uncl 500
Flowers 0 Interest payabl 5
Van 700 Flowers payable 50
500 Receivable 350
500 4,410 1,255
700
700
ith cash 300
300
300
350
350
300
300
g 800, 750 paid, 50 in credit
800
750
50
1250
1250
800
800
240
240
40
40
5
5
1600
1100
40
5
455
0
Equity
Share capital 2,750
Retained earn 405
3,155 4,410
Capital expenses
CAPEX
Dr. Asset
Cr. Cash/payables
1 Modyfies or develope your asset

2 Increase of useful life
3 Costs of production or other costs
Capital income
Asset
1
Revenue 8,000
Expenses
NP 8,000
1
Revenue 8,000
Expenses -4000
NP 4,000
1-Jan-20
Dr. Asset/Cost
Cr Cash
31-Dec-20
Dr. Depreciation expenses
Cr. Accumulated depreciation
31-Dec-20
31-Dec-21
Asset 12,000
31-Dec-22
Asset
Dr. Acc. Dep 20,000
Cr. Cost 20,000
What we need to know about asset?

Cost of the asset
Depreciable base (cost - residual value)
Residual value, scrap value/salvage value
Useful life
Depreciation expenses
Straight-line method
4.1
Cost 10,000
Residual value, scrap val 2,160
Depreciation rate 40%
Cost Depreciation base

Year 1 10,000 10,000
Year 2 10,000 6,000
Year 3 10,000 3,600
Question page
Cost 17,000
Residual 2,000
Useful life 5
Reducing balance 35%
Straight line
Year 1 17,000 15,000
Year 2 17,000 15,000
Year 3 17,000 15,000
Year 4 17,000 15,000
Year 5 17,000 15,000
REDUCING BALANCE
Year 1 17,000 17,000
Year 2 17,000 11,050
Year 3 17,000 7,183
Year 4 17,000 4,669
Year 5 17,000 3,035
Example 4.9
Cost 24,000
Useful life 4
Annual depreciation 6,000

9 months 4,500
Cost 100,000 100,000
1.01.2011 31.12.2011
CA 60,000
60,000

Year 1 100,000 100,000
Year 2 100,000 60,000
Year 3 100,000 36,000
Year 4 100,000 36,000
Year 5 100,000 36,000
REVALUATION 1,990
Building 30,000
Land
5.1 Carrying amount

01.01.2001 01.01.2006
Land 20,000 20,000
Building 30,000 25,000
50,000 45,000
Dr. Depreciation expenses 1000

Cr. Accumulated deprecition 1000 1
2
Carrying amount 25,000 3
Cost 30,000
Accumulated depreciation -5000
2
31.12.2006
Example 6.1
Cost 25,000
Residual value (scrap) 7,000
Useful life 6
Accumulated depreciation 9,000

Carrying amount 16,000
Cash 17,500
Gain on disposal 1,500

Cost
Dr. Cash 17,500 Residual value (scrap)
Dr Accumulated 9,000 Useful life
Cr. Cost 25,000
Cr. Gain on disposal 1,500 Accumulated depreciation
Carrying amount
Cash
Loss in disposal
Revenue expenses
OPEX
Dr. Expenses
Cr. Cash/payables
pe your asset
or other costs
Revenue income
20,000
2 3 4 5
8,000 8,000 8,000 8,000
-20,000
8,000 8,000 8,000 -12,000
2 3 4 5
8,000 8,000 8,000 8,000
-4000 -4000 -4000 -4,000
4,000 4,000 4,000 4,000
20,000 Cost
20,000 20,000
4,000
4,000
20,000
<<Carrying amount
Cost
4,000 20,000
4,000
20,000
4000 Cost
4000 20,000
8,000
20,000
Cost
20,000
20,000
Depreciable base (cost - residual value)

Useful life
Depreciation method
Reducing balance
Carrying
Dep expenses Acc Dep.
amount
4,000 4,000 6,000
2,400 6,400 3,600
1,440 7,840 2,160
145
Carrying
amount
3000 3000 14,000
3000 6000 11,000
3000 9000 8,000
3000 12000 5,000
3000 15000 2,000
Carrying
amount
5,950 5,950 11,050
3,867 9,818 7,183
2,514 12,331 4,669
1,634 13,965 3,035
1,062 15,028 1,972
100,000
31.12.2012 31.12.2013 31.12.2014

36,000 24,000
12,000
Carrying
amount
40,000 40,000 60,000
24,000 64,000 36,000
12,000 76,000 24,000
12,000 88,000 12,000
12,000 100,000 0
2023 33
500,000
Revalued amount
01.01.2006 Revaluation suplus 01.01.2011
75,000 55,000 75,000
75,000 50,000 60,000
150,000
Revaluation suplus
Reverse old figures related to asset
Recognise Revalued amount
01.01.2006
LAND
Reverse old figures related to asset
Dr. Land (new) 75,000 Dr.

Cr. Land (old) 20,000 Cr.
Cr. Revaluation suplus 55,000
BUILDING
Dr. Building (new) 75,000 Dr.
Dr. Accumulated depreciation 5000 Dr.
Cr. Building (old) 30,000 Cr.
Cr. Revaluation suplus 50,000
01.01.2011
Dr. Revaluation suplus 20,000 Dr.

Dr. Accumulated depreciation 15,000 Dr.
Dr. Cost (new) 40,000 Cr.
Cr. Cost (old) 75,000
35,000 Dr. Cash 17,400

3,000 Dr Accumulated 14,000
8 Dr Loss on disposal 3,600
Cr. Cost 35,000
14,000
21,000
17,400
3,600
Acc. Dep
4,000
4,000
Acc. Dep
4,000
4,000
8,000
Acc. Dep
8,000
4,000
12,000
Acc. Dep
16,000
4,000
20,000
31.12.2015
12,000 -
Revalued amount Revaluation loss
40,000 20,000
Land 55,000
Revaluation s 55,000
Building (new 45,000

Accumulated 5000
Accumulated 15,000
Cost 35,000
Sales Tax VAT
Payables >>>> Invoice
31-Dec-21
Accrual liability without invoice
31-Dec-21
Dr Electricity expenses 300
Cr Acrrual 300
5-Jan-22 306
Dr Acrrual 300
Cr Electricity expenses 300 Dr
Dr
Dr Electricity expenses 306 Cr
Cr Electricity payables 306
Prepyments
31-Dec-23 31-Dec-23
Dr Prepyments 30,000 Dr Prepyments 18,000
Cr Cash 30,000 Cr Cash 18,000
5-Mar-23 5-Mar-23
Dr. Asset 30,000 Dr. Asset 30,000

Cr Prepyments 30,000 Cr Prepyments 18,000
Cr Cash 12,000
Salary expenses Cash Paid BS Accrual

2016 2016 2016
Staff 105,600 January 8000 Dec-15 December

Trainee 4,200 February 8800 Jan-16
Toatal 109,800 March 8800
April 8800
May 8800
June 8800
July 8800
August 9500
September 9500
October 9500
November 9500
December 9500
108,300
Accruals
500
14,000 14,100
600
Acrrual 300
Electricity expenses 6
Electricity payables 306
BS Accrual
9,500
2018
31-Dec-18 Allowance Bad debt
Dr. Receivables 500,000 Dr. Irrecoverable debt expenses Dr.
Cr. Revenue 500,000 Cr. Allowance Cr.
31-Dec-22
Dr. Bad debt expenses 500,000
2.5 Example
31 December 2022 BS
Allowance 1%
Dr. Irrecoverable debt ex 280

Cr. Allowance 280
31 December 2023 BS
Receivables 40,000 38,000 Receivables
28,000
Dr. Irrecoverable debt ex 1,720
Cr. Allowance 1,720
40,000
2.6 Example Receivables
Dr. Allowance 4,393 BS

Cr. Irrecoverable 4,393 IS
723,800
31-May-06
Dr. Bad debt expe 540 IS
Cr. Receivables 540 BS
31-May-07
Dr. Cash 540 BS
Cr. Bad debt expe 540 IS
Receivables Allowance
125,000 2,000
5,000 2,000
120,000 4,000
Dr. Bad debt expe 5,000

Dr. Irre 2,000

Cr. Allowance 2,000
Irrecoverable debt expenses
Receivables
Allowance
280
1,720
2,000
Allowance
15,250
4,393
10,857
Differences
Cash book (Cash Bank balance (Bank
balance) account)
Humman Error Timing differences
Bank charges, bank interest
Standing orders (direct debit)
Dishounored cheques
Cash book (Cash balance) Bank balance (Bank account)

805 1,112
Humman Error 90 208.2
Unpresented cheques 425.35
1,321 1,321
Question
Cash book -610
Direct debit -715
Investment 353
Unpresented cheques -875
Bank Balance -1847
Example 3.2
Cash book (Cash balance) Bank balance (Bank account)

Blance -300 65
Unpresented cheques -500
<<<outstanding lodgements 400
Bank intrerest income -60
Bank charges -35
Human error -10
Dividends received 200
Human error 50
Unpresented cheques 25
-130 -35
e (Bank account)
<<<outstanding lodgements
e (Bank account)
Trade
Discount
Normal price 300
Discounted price 270
Dr. Receivables 270

Cr. Revenue 270
2
Cash (settlement
discount) <IFRS 15
Normal price 300
if paymennt made within 14 days: 10%
He will not take discount He will take discount

Dr. Receivables 300 Dr. Receivables
Cr. Revenue 300 Cr. Revenue
He had not take discount (paid after 60 days) =

He took discount
Dr. Cash 300 Dr. Cash
Cr. Receivables 300 Cr. Receivables
He took discount (paid after 10 days)

Dr. Cash 270 He had not take discount
Dr. Revenue 30 Dr. Cash
Cr. Receivables 300 Cr. Revenue
Cr. Receivables
270
270
270
270
300
30
270
3.1 Assets
Assets
Net assets
3.8 Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
4.3
4.8
4.1
Dr
Cr
4.11
b/d
Payables
Dr.
Cr.
Revenue
COGS
Gross profit
6.1
6.7 Current years

Opening inventory
+ Purchases
- Closing inventory
COGS
NP
6.4
Opening inventory
Purchase 1
Purchase 2
Sold
Remaining
Opening inventory
Purchase 1
Purchase 2
6.3
284,700
281,200 B
6.8
Mark -up on cost

40%
Price 140
Cost 100
6.11
Cost
Selling price
Dist.cost
NRV
Unit
Total 4,700
6.16
Opening inventory
Purchases
- Closing inventory
6.18
Opening
Purchase
Sell
Closing
6.19
Periodic
Unit Cost per unit Total
Buy 1 10 300 3000
Buy 2 12 250 3000
Buy 3 6 200 1200
28 257.14 7200
Sell 20 257
Closing 8 257 2,057.12
Kaplan
100 Cost Price
Book 1 2,280 2,900
Book 2 4,080 4,000
Book 3 1,280 1,300
Total
7.4 Asset register
7.7
Cost 170,000
Accumulated 34000
Carrying amount 136,000 136,000
Revalued amount 210,000

Revaluation surplus 74,000
7.8
1-Jul-13
Dr. Asset 20,000
Cr. Cash 20,000
31-Dec-13
Dr. Depreciation expens 1600 1600

Cr. Accumulated 1600
18,400
7.9
1-Oct-22
200,000
6
200,000
1 20,000
2 12,500
3 10500
43,000
8.2
Carrying amount
200,000
Carrying
8.14 amount
30-Jun-08 30-Jun-18
Building 1,250,000 1,000,000
Old 25,000
New 40,000
Excess depreciation 15,000
30-Jun-19
Dr. Revaluation suplus 15,000
Cr. RE 15,000
8.19
1-Jan-01
Building 1,600,000
Accumulated
Old 32000
New 50000
Excess depreciation 18000
8.21
1-Jan-07 1-Jan-07
700,000 750,000
1-Jan-07 1-Jan-09
Cost 750,000
Caarying amount 690,000
1-Jan-09
Assert
Cost 750,000
Accumulated 60,000
Carrying 690,000
Reveluation suplus 50,000
Dr. Cash 800,000

Dr. Accumulated 60,000
Cr. Cost 750,000
Dr. Revaluation suplus 50,000
Cr. RE 50,000
Cr. Gain on disposal 110,000
Kaplan
`111
Asset register Ledger account Difference
Cost 185,000
Accumulated 55,000
Carrying amount 85,600 130,000 44,400
123
Cost
860,000
80,000
180,000
960,000
9.6
1-Apr 31-Jul
Cost 60,000
Acc. Dep 4000
CA 56,000
10.6 A
Inventory Payables
12,500
85,000 87,700 <<COGS 85,400
9,800 1,300
10.1
I Variant
31 December 20X3
Rent received in advance
Dr. Cash 24,600

Cr. Unearned revenue 24,600
20X4
Dr. Unearned revenue 24,600

Cr. Revenue 24,600
Dr.
Cr.
Cr.
Cr.
Dr.
Cr.
Revenue
II Variant
Receivables
16,900
18,300
Cash 318,600
Liability (cash recei -3,800
Receivables (earned 1,400
316,200
10.12
Profit Net Assets
25,000 275,000
-10,000 -10,000
15,000 265,000
Dr. Rent expenses 10,000

Cr. Accrual 10,000
10.15
I Variant
Gas
31-Mar-16
Cr. Cash 1,000
Dr. Expenses 1,000

Cr. Prepayment 1,000
Dr. Expenses 5,000

Cr. Cash 5,000
31-Mar-17
Dr. Expenses 2,000
Cr. Accrual 2,000
Expenses 8,000
II Variant
Gas
1,000
2,000
Gas 5000
Increase 3,000
8000
Kaplan 154
Propoerty 1
12,300
13,400
Cash 280,000
25,700
305,700
I Variant
Property 1
2015
Dr. Cash 12,300
Cr. Unearned revenue 12,300
2016
Dr. Unearned revenue 12,300
Cr. Revenue 12,300
Dr. Cash 280,000

Cr. Revenue 280,000

Cr. Revenue 13,400
Revenue 305,700
Kaplan 154
Unearned revenue
102,600
88,700
Cash 838,600
Liability (cash recei 13,900
Receivables (earned 6,100
858,600
11.2
Receivables
362,000
Receivables 400,000
Dr. Bad debt expenses 38,000

Dr. Allowance 13,800

Cr. Bad debt expenses 13,800
IS 24,200
BS 325,800
16.1
Cash book -565
Dishpunored cheque -92
-657
16.3
Opening balance 2,500
Cash out -720
Cash in 190
1,970
16.5
Overdraft (8,970)
Bank charge (550)
Error by bank 425
Unpreseneted cheques 3,275
Outstanding lodgements (5,380)
(11,200)
11.4 Allowance
Gross receivables 868,500

Net receivables 840,000
42,000
Dr. Bad debt exp 28,500
Dr. Irrecoverable debt expen 4,000

Cr. Allowance 4,000
Expenses 32,500
11.5
Dr. Bad debt exp 146,000 Allowance
Dr. Irrecoverable debt expen 135,000

Cr. Allowance 135,000
218,000
281,000
11.12
Allowance
0
28,000
28,000
15.1 Receivables
10,000
79,000 80,000
9,000
15.2
Supplier payable
14,350
15.3 Payables
34,500
68,900 78,400
1,200
4,700
38,100
Contra-entry
Dr. Payable
Cr. Receivables
12.13
Provision
64,000
25,000
18,500
Dr. Provision 25,000 57,500

Cr. Cash 25,000
Dr. Provision expenses 18,500

16.6
Bank balance (overdrawn) -36,840

Outstanding lodgement 51,240
Unpresented cheques -43,620
-29,220
Kaplan
231 B
Cash book Bank statement

-190 250
Correction of error 260 -150
Unrecorded interest rece 30
100 100
242 A
Cash book (1,240)

Unpresented cheques 450
Outstanding losgements -140
Bank charges -75
(1,005)
5.2 Tax
11,910
Tax
Sales (includ 109,250 14,250 Output
Purchases 64,000 9,600 Input
4,650
5.4 Tax
Sales (includ 120,000 20,000 Output
Purchases 65,000 13,000 Input
7,000 7,000
0
5.5
Assets = Liabilities +
Cash 2,200 Tax payable 40
Inventory 400 Payables 960
2,600 1,000
Dr. Cash 1,000

Cr. Capital 1,000
Dr. Inventory 800

Dr. Rec. tax 160
Cr Payables 960
Dr. Cash 1200

Cr Payable 200
Cr. Revenue 1000
Dr. COGS 400

Cr Inventory 400
5.8
Sales 27,612.50 4,113 <<VAT Payable

Purchases 18,000 3,150 <<VAT Receivables
962.5 <<VAT Payable
14.1
Task 2
Opening invetory 11,927
+ Purchases 82,350
+ Carriage inward 2,211
- Closing inventory (13,551)
COGS 82,937
Task 4
Closing equity 51,179
Opening equity 53,091
+ Profit 5,888
- Drawings 7,800
Equipment (cost) 58,000

Acc depr.(opening) 19,000
Depreciation expense 8,700 5,850 <<<reducing balance
CA 30,300
15.4 Bs
Receivable 8,500 Payables to
-400
-400 Receivables
7,700
Dr.
Cr.
15.6
Receivables
180,000 232,200
190,000 8,000
3,300 1,500
2,400
129,200
15.10
Price 800
Discounted price 640
Settlement 608
Variant 2 608
Dr. Receivables 608

Cr. Sales 608
Dr. Cash 608

Cr. Receivables 608
15.14 Payables
142,320
27,490 215,965
196,360
1,430
2,420
130,585
15.16 D
Control account 68,566

Undercast 99
68,665
15.19
31-Oct-16

Cr. Sales 1,000
3 Novenber 2006
Dr. Bank 950
Dr. Sales 50
17.8
Net profit 83,600 97,100
Correct
Dr. Van 18,000 Dr.

Cr. Cash 18,000 Cr.
Dr. Dr.expense 4,500

Cr. Ac.dep 4,500
13,500 97,100
17.1 Net profit 10,200 <wrong calculated

Cap. 3,000
Cap. Resp. 1,400
14,600
18.1
Correct What accountant did
Dr. Cash 333,000 Dr.
Cr. Capital 333,000 Cr.
Cr.
Dr. expenses 2,800 Cr.

Cr. Cash 2,800 Cr.
Dr.
Dr.
Dr. Car 78,400 Dr.

Cr. Cash 78,400 Cr.
Cr.
Dr. Payables 1,200 Dr.

Cr. Receivables 1,200 Cr.
13.7
500,000 Ordinary shares, 0.25 125,000

Share premium 100,000
225,000
1 for 2, 1USD
Share issued (units) 250,000
Dr. Cash 250,000

Cr. Share premium 187,500
Bonus issue 150,000.0
Dr. Share premium 37,500

Kaplan
203
Shares 250,000
Bonus 62,500
Dr/ Premium 31,250.0

Cr. Capital 31,250.0
19.1
Correct
Dr. Cash 4,400,000

Cr. Share capital 2,000,000
Cr. Share premium 2,400,000
Cost 1,400,000
CA 700,000
Carrying amount
Dr. Cash 600,000

Dr. Loss on disposal 100,000
Dr. Accumulated depreci 700,000
Cr. Cost 1,400,000
Task 1 100,000 Loss

Task 2 350,000
Dr. Expenses 200,000 <<<RE

Dr. Acc.dep 350,000

Cr. Expenses 350,000 <<<RE
Dr. Expenses 140,000 <<<RE

Cr. Inventory 140,000
Task
Cost Price Selling expenses
500,000 400,000 40,000
19.2
Task Allowance
10
6
Dr. Admin.exp 6
Cr. Allowance for receivable 6 16
Task 3
Building 37,000
Plant 22,000
Dr. COGS 59,000

Cr. Acc. Depreciation 59,000
000
Cost of sales 1225
Opening 160
+ Purchases 1140
- Closing 75
13.4 B
Bonus 50,000
Dr. Share premium 25,000.0

Cr. Share capital 25,000.0
Issue 60,000
Dr. Cash 48,000.00

Cr. Share capital 30000
Cr. Share premium 18,000.00
13.8
30-Sep-22
1-Jul-22 750,000
1-Jul-22
Dr. Cash 1,000,000
Cr. Loan 1,000,000
30-Sep
Dr. Loan 250,000

Cr. Cash 250,000
Dr. Interest expenses 20,000

Cr. Cash 20,000
Interest expenses 45000

Interest expenses 8,750
Total expenses 73,750
13.14
Dr Cash
Cr. Dividend income
5,000
25,000
0.20
18.5 A
Correct Accountant did

Dr. Gas expenses 420 Dr.
Cr. Gas payables 420 Dr.
Cr.
Dr. Receivables 50 Cr.

Cr. Sales 50 Cr.
Dr.
Dr. Cash 70 Dr.

Cr. Interest income 70 Cr
Dr
18.8
Dr. Sales return Dr. Purchase

Cr. Cash Cr. Cash
18.9
Dr. Cash Dr. Cash
Cr. Receivables Dr. Receivables
Cr. Suspense
Dr. Cash
Cr. Suspense
Dr. Purchases
Dr. Purchases
Cr. Cash
Cr. Suspense
18.13
80,000
Dr. Cash 120,000 Dr.

Cr. Share capital 20,000 Cr.
Cr. Share premium 100,000 Cr.
19.4
Net profit before tax 350

Depreciation 90
Loss on disposal 13
Gain on disposal -5
Increase in inventory -48
Increase in receivables -75
Increase in TP 8
Tax paid -190
Cash from operating acti 143 IS, CA
Cash from investing activity

Purchase of intangible N -50
Purcase of tangible asset -201
Receipt from sale of inv 62
Cash from investing activ -189 LTA
Cash from financing activity

Issue of share capital 60
Long term loan 100
Dividends paid -50
Cash from financing activ 110 LTL. Equity
Net cash 64
Opening cash -97
Closing -33 -33
30.10
Share issue 60
Bank loan -50
Financial activity 10
30.15 Carrying amount Cost - Accumulated depreciation
Carrying amount
462
50
>>>Additions 204 45
38
633
30.21
Receivables
163,000
750,000 729,000 <<cash received
184,000
17.11
Revenue (Sales)
- COGS 50,000
Opening inventory
Purchases 50,000
Closing inventory
Gross profit 50,000
Sattionary expenses
Net ptrofit
26.11
PUP
Intragroup Revenue 30,000
Intragroup COGS 22,500
Gross profit 7,500 0.25
% of remianing (unsol 40%
PUP 3,000
Gross profit 627
Task 25.1
Swing and cat
Conideration transferred 120,000
Fv of NCI 40,000
Total 160,000
Share capital 100,000
RE 50,000
Total NA 150,000
Goodwill 10,000
Provision for unrealised

IG Revenue 100,000
IGCOGS 80,000
IG GP 20,000
* % of remaining inventory 50%
PUP 10,000
"$000
Consolidated cost of saleCOGS P + COGS Sub-Intra Rev+PUP 3,410
Parent------Sub PUP (parent)

Sub----parent PUP ( Parent and NCI)
Parent------Sub Swing Cat
Per question 400 200
PUP -10
Pre-acquisition RE -50
150
GROUP share 120
GROUO RE 510
NCI
Fv of NCI 40
RE of Sub atributable ti N 30
Share of NCI in CON BS 70
35.9
Provision for unrealised
IG Revenue 50,000
IGCOGS 40,000
IG GP 10,000
% of remaining inventory 100%
PUP 10,000
RE 560 A
= Liabilities + Equity
Opening
capital
+Capital
introduced
+Profit -
Drawings=
Closing
capital
(Equity)
Share capital
Retained ernings (profit)
-Drawings
= Liabilities + Share capita+ Retained erni-Drawings
= Assets "- Liabilities = Equity
Purchases 400
Cash 400
Dr. Purchases 400
Purchases 250 Dr. Payables 250
Payables 250 Cr. Cash 650
Payables 250
Cash 250
T Account
Debit side Credit side
Balance
b/d
(brought
down)=ope
ning
balance
Balance carried down (closing balans)
Dr. Purchases 450

Cr. Payables 450
Last month
Dr. Purchases 700
Cr. Payables 700
Dr. Payables 700

Cr. Purchases/P 700
Dr Payables 250
Dr Purchases 450
Cr. Purchases/P 700
Receivable
b/d 10,000
79,000
80,000
9,000 c/d
Dr. Receivable 79,000

Cr. Credit sales 79,000
Dr. Cash 5,000 Dr. Cash 85,000

Cr. Cash sales 5,000 Cr. Cash sales 5,000
Dr. Cash 80,000
Tin Co Customer Steel Co supplier
Purchases 250 Dr Receivables 250

Payables 250 Cr Sales 250
Inventory
3,000 Return inwaSales return
20,000 16,000 Dr. Sales return 50
4,000 Cr. Cash 50
Return outwPurchase return

3,000 c/d
Dr. Cash
Cr. Purchases/Purchase return
COGS 16,000
Inventory 16,000
38000
16,000
Gross profit 22,000
1-Jul-12 30-Jun-13 7-Jul-13

X 950,000
+ 11,750
- 13000
- 1500
= 950,000
952,750
Current years
Opening inventory Opening inv if Understated
+ Purchases
Closing inventory if Understat - Closing inventory
Overstated COGS Understated
Understated -300,000 Overstated 300,000
Unit Cost per unit

Opening inventory 700 190
500 220
300 230
1500
650
Opening inventory 50 190 9,500

500 220 110,000
300 230 69,000
850 188,500
Unit Cost per unitFuture price Cost to sell NRV

400 80 75 3.75 71.25
28,500
16000 800 20 28 6 22
236,700
Cost NRV
Coats 32,000 28,500 3,500
Dr. Write-down 3,500

Cr. Inventory 3,500
Mark -up on cost Gross margin
40%
Revenue 167 100%
Cost 100 60%
GP 67
Gross margin 40%
Gross profit Revenue-COGS
=
Revenue Revenue
1-(COGS/Rev= 40%
COGs/Reven= 60%
Basic Super Luxury

6 9 18
9 12 15
1 4 5
8 8 10
200 250 150
1,200 2,000 1,500
FIFO______AVCO
56,200
136,500
59,800
132,900
Unit Cost per uni Total

50 40 2000
50 50 2500
100 45 4500
60 45
40 45 1800
AVCO
Perpetual/Continous
Unit Cost per unit Total

Buy 1 10 300 3000
Buy 2 12 250 3000
22 272.73 6000
Sell 1 8 272.73
Remaining 1 14 272.73 3818

Buy 3 6 200 1200
20 250.9 5018.00
Sell 2 12
Closing 8 250.9 2007.20

NRV
2,784
3,840
1,248
7,368
Nominal ledger (1C) Difference
135,600 10,000
Dr. Expenses 20,000

Cr. Cash 20,000
1-Apr-23 30-Jun-23 31 September 2023

250,000 210,000 210,000
3 3
250,000 210,000
Carrying amount
30,000
20,000
150,000
Revalued amount Revaluation suplus

30-Jun-18 30-Jun-18 30-Jun-19 30-Jun-20
1,600,000 600,000 585,000 570,000
Revalued
Carrying amount amount Rev. suplus
1-Jan-06 1-Jan-06 1-Jan-06 31-Dec-07
1,440,000 2,250,000 810,000 792,000
160000
1,440,000
Rev. s
50,000
Accumulated dep
397,000
43,000
18000
78000 96000
450,000
Payables
1,700
85,000 <<Purhases
31 December 20X3
Rent owning by tenants
Dr. Receievable 16,900

Cr. Revenue 16,900
Cash 318,600
Receivables 16,900
Unearned revenue 28,400
Revenue 273,300
Receievables 18,300
Revenue 18,300
316,200
Liability
24,600
28,400
Electricity
31-Mar-16
Dr. Expenses 500
Cr. Accrual 500
Dr. Accrual 500

Dr. Expenses 6,100
Cr. Cash 7,800
Expenses 6,100 14,100
Electricity
500
1,200
Electricity 7,800
Decrease -1,700
6,100
Property 2
5,400
6,700
160,000
-12,100
147,900 453,600
Property 2
2015
Cr. Revenue 5,400
2016
Dr. Cash 160,000
Cr. Unearned re 6,700
Cr. Revenue 147,900
Receivables
42,300
48,400
Allowance
50,000
13,800
36,200
Allowance
38,000
4,000
Allowance
83,000
135,000
85,000
80,000 5,000
Dr. Cash 80,000
My payable
14,500
Dr. Purchases
Cr. Payables
Dr. Purchases
Cr. Cash
<<<
Bank statement
440
Tax
4,540
4,650
2,720
Tax
0
7,000
Equity
Capital 1,000
RE 600
1,600
<<VAT Payable
<<VAT Receivables
<<VAT Payable
<<<reducing balance
800 300
500 0
Payables to Bridge 500

Receivables from Brid 500
Dr. Receivables 10,000 0

Cr. Sales 10,000
Dr. Cash 13,300


Cr. Cash 3,300
Dr. Bank 950
Cr. Sales 950
Motor van expneses 18,000

Cash 18,000
What accountant did Correction

Cash 333,000 Dr. Suspense 3,000
Capital 330,000 Cr. Capital 3,000
Suspense 3,000
Asset 2,800 Dr. Asset 2,800

Cash 2,800 Dr. expenses 2800
Suspense 5,600 Cr. Suspense 5,600
Suspense 500 Dr. Petty cash 500
Cr. Suspense 500
Car 87,400 Dr. Suspense 9,000

Cash 78,400 Cr. Car 9,000
Suspense 9,000
Receivables 1,200 Dr. Receivables 2400

Payables 1,200 Cr. Payables 2400
Suspense
3460
3,000
5,600
9,000 500
2440 DR
225,000
250,000
475,000 250,000
per share
1 250,000
0.25 62,500
0.75 187,500
What acc. Did Correction
Dr. Cash 4,400,000 Dr. Suspense 4,400,000

Cr. Suspense 4,400,000 Cr. Share capita 2,000,000
Cr. Share prem 2,400,000
Depreciation 350,000
Dr. Cash 600,000 Dr. Suspense 600,000

Cr. Suspense 600,000 Dr. Loss on disp 100,000
Dr. Accumulated 700,000
Cr. Cost 1,400,000
Selling expenses NRV Write -off

360,000 140,000
Share premium 173,000
500,000 30-Jun-23
Accountant did Correction
Expenses 240
Supense 180
Gas payables 420
Receivables 50
Sales 50
Suspense 100
Cash 70
Suspense 70
210
50
50
100
130
130
130
130
Cash 120000
Share capital 20000
Suspense 100,000
Cost Acc.depreciation
595 290
>>>Addition 201 85 40 90 <<<blanced figures
9
720 340
Tax payables
240
190 240
290
RE
100
110
50
160
depreciation
45
429
<<cash received
10,000
10,000
10,000 40,000
-10,000
30,000
Dr. COGS/RE
Cr. Inventory
Sub----parent Swing Cat
Per question 400 200
PUP -10
Pre-acquisition RE -50
140
GROUP share 112
GROUO RE 512
NCI
Fv of NCI 40
RE of Sub atributable t 28
Share of NCI in CON B 68
37
March-June 160,000
Depreciation expenses 8,000
60
Development expenses 80,000
Expenses 88,000
38
Out VAT (patables) 140,000 Tax

Input Vat 87,990 23,778
140,000
87,990
75,788
Purchase 3600
Payables
31
Revenue 630,000 >>cash paid 453,630
COGS 450,000
34,600
Revenue COGS
140 100
630,000 X
X 450,000
28
COGS 313,200 80%
Revenue 391,500
29 Supspense

Cr. Sales
40
January-Feb 532 2
898 3
814 3
840 3
322 1
3406.00
Payables Inevntory
29,780 24,300
458,450 >>>Purchases 458,450 450,000
32,750
Supspense
759
131
622
IAS 7
Operating activity
Cash in
Cash out
day to day transaction
Dividends paid
Direct method
Operating activity Financing activity
XX YY
Cash receipts from customers 20

- Cash paid to suppliers 5
- Cash paid to emploees 3
Cash generated from operations 12
- Interest paid -1
- Taxes paid -2
- Dividends paid -3
Net cash from operating activity 6
Operating activity Payables

Cash receipts from customers 32,900
- Cash paid to suppliers (17,950)
- Cash paid to emploees (11,250) 17,950
Cash generated from operations 3,700
- Interest paid (2,100) 2,550
- Taxes paid
- Dividends paid
Net cash from operating activity 1,600
Indirect method
Profit before Tax Revenue
+ Depreciation COGS
+ Interest expenses Expenses
+ Loss on disposal Profit before Tax
- Gain on disposal
Adjustments to Working Capital
Increase in receivables -16
Increase in invetory -4
Decrease in prepayment 5
Increase in trade payables 6
Cash generated from operations
Interest paid
Taxes paid
Dividends paid
Net cash from operating activity
Cash-flow
Financing activity Investment activity

Sale of own shares Building
Loan from banks Deposits
Dividends paid Purchase/sale of 3rd party shares
Dividends recived
Cash-flow
Indirect method
Investment activity Operating activity Financing activity Investment activity
ZZ XX YY ZZ
Payables Wages patables

1,000 1,500
19,500 10,500
11,250
750
Cash+ Receivables
Opening+Purhases-Closing Inventory
Cash + Payables+Prepayments
t before Tax
Investment activity
Subsidiry A
Parent Company Subsidiry A

Revenue 100 20
<20%
Trade Investment
IFRS 9
No influence
No Consolidation
Investment in assosiate
1-Jan
Dr. Investment in assosiate 60,000 <BS, 25%

Cr. Cash 60,000
Dr. Investment in assosiate 6,000 <<<Receivables

Cr. Investment income 6,000
Dr. Cash 1,500

Cr. Investment in assosiate 1,500
1-Jan
Dr. Investment in assosiate 6,500

Cr. Investment income 6,500
31-Dec-24
Investment in assosiate 71,000
Subsidiary
Apple Pear Consolidated

Receivables 60,000 40,000 100,000
Rules of consolidation
1 Add together
2 Intra-group transactions
3 Non-controlling interest (NCI)
Consolidated Revenue Revenue P+ Revenue Sub- Intragroup revenue

Consolidated COGS COGS P+COGS Sub- Intragroup revenue + PUP
PUP
Intragroup COGS -3,000
Gross profit 2,000
% of remianing (unsold, int 50%
PUP 1000
Question
Consolidated Revenue Revenue P+ Revenue Sub- Intragroup revenue
Consolidated COGS COGS P+COGS Sub- Intragroup revenue + PUP
PUP
Gross profit 5,000 20%
% of remianing (unsold, int 100%
PUP 5000
Revenue 775
COGS 480
GP 295
Admin 135
PBT 160
Income 15
NP 145
Parent sold to SUB SUB sold to parent

Profit attributable to
Group 133.75 132.5
NCI 11.25 12.5
133.75 132.5
Remaining inventory 10,000
% 0.40
Total inventory 25,000
PUP
Gross profit 5,000
% of remianing (unsold, int 40% Remianing inventory 10,000
PUP 2,000 8,000
2,000
Dr. COGS 2,000
Cr. Inventory 2,000
Group
Parent Company
Subsidiry B Subsidiry C
Subsidiry B Subsidiry C Consolidation

10 5 135
Investment
50%-100%
Trade Investment 20%-49%
Investment in assosiate Investment in subsidiary
No influence Equity method Control
No Consolidation Significant influence 3 out 5
No Consolidation Consilidation
IAS 28 IFRS 3
at the date of acquisition
Consuderation transferred by parent 30
+ Consuderation transferred by NCI 10
Total 40
- FV of net assets of the company (FV of equity) 23
Share capital of SUB 10
Share premium (SUB) 5
Retained earnings 3
Revaluation suplus 8
"+/- FV adjustment -3
Goodwill 17

Consuderation transferred by parent 80
Consuderation transferred by NCI 0
Total 80
FV of net assets of the company (FV of equity) 60
Share capital of SUB 50
Retained earnings 10
"+/- FV adjustment 0
Goodwill 20
31-Mar-21
NCA
Goodwill 20,000
Current assets 100,000
Total 120,000
Odinary shares 75,000 <<only parent

Retained earnings 45,000
Total 120,000
31-Mar-22
NCA
Goodwill 20,000
Total 150,000

Total 150,000
QUESTION
Consideration transferred by parent 67,000
Consideration transferred by NCI 0
Total 67000
FV of net assets of the company (FV of equity) 64000
Share capital of SUB 20,000
"+/- FV adjustment 23,000
Goodwill 3,000
Dr. Land building 23,000

Cr. Goodwill 23,000
NCA
Land and building 114,000
Goodwill 3,000

Equity 212,000
Liabilities 30,000
Total E+L 242,000
2.4.1 Example N
Sub. Shares 12,000 4 5
12,000 X
Parent shares 15,000
90,000

FV of net assets of the company (FV of 75,000
Goodwill 15,000
Non-controlling interest
3.2 Example
Consideration transferred by NCI 15,000
Total 75,000
FV of net assets of the company (FV of equity) 45,000
Share premium (SUB) -
Revaluation suplus -
"+/- FV adjustment -
Goodwill 30,000
Assets
Tangible 85,000
Goodwill 30,000
Equity
RE 62,500
NCI 17,500
Total Equity 160,000
Liabilities 40,000
Total 200,000
NCI
Consideration transferred by NCI 15,000
Share of RE of SUB 2,500
Share of NCI 17,500
Godwill
Consideration transferred by parent 10
Consideration transferred by NCI 2
Total 12
FV of net assets of the company (FV of equity) 7.5
Goodwill 4.5
Question
Total 46,000
FV of net assets of the company (FV of equity) 40,000
"+/- FV adjustment -
Goodwill 6,000
PUP
Intra-group Rev 50,000
IG COGS 40,000
GP 10,000
% rem. Inventory 25%
PUP 2,500 Sub----Parent
Dr. Payables 12,000

Tangible assets 120,000
Goodwill 6,000
Trade rec 43,000
Inventory 12,500
Equity
RE 54,500
TP 27,000
Total 181,500
-
<<only parent
<<only parent
<<only parent
1-Jan
Going concern basis
Adjusting
Fraud
Errors
NRV (write-off)
Bad debt
Impairement
Ratio 2017 2016

Operating profit/Revenue 11.6% 12.8%
2.96% 2.6%
Profit for the year/Reven 8.66% 10%
31-Dec 31-Mar
Reporting date Report issue date
IAS 10
Events after the reporting period (subsequent events)
Adjusting Non -Adjusting events
Material Immaterial
NRV (write-off) Disclose Do nothing
Bad debt Aqusition/disposal of main asset, branch, department
Impairement Law suits, litigation commenced
Fire
Natural disasters
Profitability ratios Gross profit
Gross profit margin Revenue
Net profit
Net profit margin Revenue
Return on capital employes (ROCE)
Capital Employed `=
Total assets `=
Total assets -Short term Liabilities
20X8
ROCE 36%
Return on Equity (ROE)
ROE 30.1%
Net Profit Margin `=
Asset Turnover `=
PBIT
Revenue `*
NP 30%
Asset turn 0.8
Luquidity ratios
Current Ratio `=
Quick Ratio =(Acid test ratio) `=
Receivables collection period

`=
Paybles payment period `=
Inventory turnover period `=

Solvency Ratios
Total Debt
Debt ratio `= Total Asset
LT DEBT
Gearing Ratio `= LT DEBT + Equity
Equity
Leverage ratio `= LT DEBT + Equity
PBIT
Interest cover `= Interest expenses
2008 2007
20.70 12.77
Efficiency Ratios
Revenue 10
COGS 8
GP 2
GP margin 20%
Cogs 32,500
`=
Opening 6,000
+ Purchases x
- Closing 3,800
Purchases 30,300
TP 57
28.9
Revenue 2,402
COGS 1,602
Gross Profi 800
Other expenses 680
NP 120
NP % 5%
Current assets 2.6363636
Payables collection 53
PBIT
`= Capital Employed
Total assets -Current Libilities `= Equity + Long term liabilities
Short term liability + Long term liability`+ Equity
`= Long term Liabilities +Equity
20X7
32% 4%
`= Net profit-Dividends to preference shareholders

Equity
29.7%
PBIT
Revenue
Revenue
Capital employed
Revenue PBIT
=
Capital employed Capital employed = Return on capital employes (ROCE)
24% Return on capital employes (ROCE)
Current assets 2.5625

Current Liability 8
Current asseets-Inventory 1.75

Current Liability
Receivables (average recivables)

*365
Credit Sales
Trade payables
*365
COGS
Inventory
*365
COGS
>2
n capital employes (ROCE)
Dr. Inventory 200,000

Cr. Cash 200,000
Dr. COGS 150,000
Cr. Inventory 150,000
50,000
121.6667

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Financial reporting

All the losses

Financial accounting Management accounting (cost accounting)

IAS International Accounting standards

Income statement (Statement of profit or loss and other comprehensiv income)

Balans sheet (Statement of financial position)

Change in equity (Statement of change in equity)

Assets = Liability + Equity (Capital)

Need for audit,

Legal and accounting

unting (cost accounting)

IASB (International accounting standards board)

IFRS Advisory Councile IFRS interpretation committee

Law based Principle based

Underlying assumption: Going concern

Trade payables 500,000 750000

Characteristics of financial information

Faithful represenation << not bias

Business entity concept

Accrual Cash basis

We sold the product in 1st March 2021 with cash

<<New IFRS, more fair presention

he payment will be after 30 days.

Books or prime entries

What is petty cash?

Revenue - Expe= Net proft

1 Liza put into the Company 2,500 USD

ASSETS = LIABILITIES + EQUITY

Dr. Stall 1800

Dr Flowers (inventory) 650

ASSETS = LIABILITIES + EQUITY 0

3-Jul Sold all inventory for 900

Dr. COGS 650

ASSETS = LIABILITIES + EQUITY

Dr. Drawings 180 <<<negative equity

ASSETS = LIABILITIES + EQUITY

Purchased flowers for cash

ASSETS = LIABILITIES + EQUITY

Salary paid to Ethel

Cash taken by Liza

ASSETS = LIABILITIES + EQUITY

2 Dr. Inventory 4,300

3 Dr. Payables 3,600

4 Dr. Receivable 5,800

5 Dr. Cash 3,200

Example 1.5 Page 93

Double entries for 31 March 2017

a. Dr. Purchases 1,000

b. Dr. Cash 240

c. Dr. Wage expenses 260

Dr. Cash 500

Closing net assets = Opening

Closing net assets - Opening

31-Mar-17 Dr Cr 1 Statement of profit or loss/Income

+ Profit "- Drawings

Statement of profit or loss/Incomestatement

Statement of financial postion/Balace sheet

Raw materials 20,000