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*** 2013: Accounting Before/After ***
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lizardspock wrote: »For P&L accounts, is investment income entered under the Operating Income heading, or are you meant to add it on to the Operating Profit before subtracting debenture/mortgage interest, or does it even matter??
I'm pretty sure it's under the operating income heading. Well that's in the published profit and loss anyways! :P
Does anybody know how to deal with this part of the incomplete records : "It was agreed that Lynch would pay interest on the last day of each month at a rate of 5% per annum. The capital sum was to be repaid in a lump sum in the year 2015 and to provide for this the bank was to transfer €1,200 on the last day of each month from Lynch's business bank account into an investment fund commencing on 30/9/2006 " .. ? It's Q 7 in the 2007 paper if anyone can please help!
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I'm pretty sure it's under the operating income heading. Well that's in the published profit and loss anyways! :P
Does anybody know how to deal with this part of the incomplete records : "It was agreed that Lynch would pay interest on the last day of each month at a rate of 5% per annum. The capital sum was to be repaid in a lump sum in the year 2015 and to provide for this the bank was to transfer €1,200 on the last day of each month from Lynch's business bank account into an investment fund commencing on 30/9/2006 " .. ? It's Q 7 in the 2007 paper if anyone can please help!
To get the interest:
-180000×5%%12×4=3000= payable
-3000-2250(paid)= 750 (due ->>balance sheet)
-3000(payable) - 600 (20% drawings)= 2400 ->> P&L
Investment:
-1200×4 (4 months Sep-Dec)=4800
-4800+ 25 ( interest earned by fund to date at end of year) = 4825
-Goes to Balance sheet under financial fixed assets
Just happened to do the question earlier 0 -
bluejaymraz wrote: »To get the interest:
-180000×5%%12×4=3000= payable
-3000-2250(paid)= 750 (due ->>balance sheet)
-3000(payable) - 600 (20% drawings)= 2400 ->> P&L
Investment:
-1200×4 (4 months Sep-Dec)=4800
-4800+ 25 ( interest earned by fund to date at end of year) = 4825
-Goes to Balance sheet under financial fixed assets
Just happened to do the question earlier
Thanks a million, I really appreciate it!
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I'm pretty sure it's under the operating income heading. Well that's in the published profit and loss anyways! :P
Well in the published accounts you have a special place for Investment Income, right over Exceptional Items which normally just seem to be Profit on sale of a fixed asset. Which is actually quite confusing 'cos I would've assumed it was just a regular old gain as it is in most accounts, thus operating income. But no.
Equally confusing is in Cash Flows where if you were to do out an abridged profit and loss, investment income is added after operating profit. I just go along with these things at this stage, what's the point of understanding the intricacies of it all now... 0 -
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Thank you! I have that as my Total Net Assets figure but my Capital Employed is 1360580.
No problem! I can't upload the image but here's the financed by:
Creditors:amounts falling due...
5% mortgage 300000
Capital and reserves
Capital 1/1/12 880000
Add net profit 71880
Less drawings (27800)
Revaluation reserve 1345000 -
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CookieMonster.x wrote: »Would anyone be able to explain 2010 q7 part 3 please? It's a suspense question about winning a van and I don't understand the marking scheme.. Perhaps leaving a whole pile of accounting til now wasn't such a good idea!
Thank you
Hey there!
Okay this is a confusing one but follows the same steps each time.
Mccarthy(himself) won 30000 euro van. And he gave this van to the business. He then took a van of 22500 from the business for private use (treat these as two seperate events).
So in the "was" bit, you have a debit in the cash book of 22500.
Now, when you give something of your own to the business, it is called "capital". this is strangely treated as an expense account. So capital will go up by 30000 on the credit side.
Now he then took from the business 22500 euro, this is called "drawings". drawings account is the opposite to the capital account and thus increases by 22500 on the debit side.
Then the next bit possibly confuses you.... You have to open a "purchases" account. You treat the win as if you bought something, and you treat the 22500 as if you sold it. so the purchases account will be 30000 debit, 22500 credit.
The later part is catchy, but yo have to learn this. My teacher couldn't explain it.
I hope this helped.0 -
outnumbered wrote: »Hey there!
Okay this is a confusing one but follows the same steps each time.
Mccarthy(himself) won 30000 euro van. And he gave this van to the business. He then took a van of 22500 from the business for private use (treat these as two seperate events).
So in the "was" bit, you have a debit in the cash book of 22500.
Now, when you give something of your own to the business, it is called "capital". this is strangely treated as an expense account. So capital will go up by 30000 on the credit side.
Now he then took from the business 22500 euro, this is called "drawings". drawings account is the opposite to the capital account and thus increases by 22500 on the debit side.
Then the next bit possibly confuses you.... You have to open a "purchases" account. You treat the win as if you bought something, and you treat the 22500 as if you sold it. so the purchases account will be 30000 debit, 22500 credit.
The later part is catchy, but yo have to learn this. My teacher couldn't explain it.
I hope this helped.
Thanks, I get you know! I was using drawings instead of purchases and wasn't sure what that was about. Thanks a million, I guess I should keep all my questions instead of losing them in the pile of sheets on my floor :P0 -
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Just wondering, is anyone in the same position as me? I do Q1, not the 60 markers. Our teacher didn't cover ratios so I do Q6, 7 and I ALWAYS do Q9 over 8.
100mark questions have never come up 2 years in a row so, is anyone bothering to study cash flow / service firm? I really dont want to waste time going over them when they dont have any chance of coming up! Plus cash flow is such a horrible question
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Just wondering, is anyone in the same position as me? I do Q1, not the 60 markers. Our teacher didn't cover ratios so I do Q6, 7 and I ALWAYS do Q9 over 8.
100mark questions have never come up 2 years in a row so, is anyone bothering to study cash flow / service firm? I really dont want to waste time going over them when they dont have any chance of coming up! Plus cash flow is such a horrible question
Yeah I'm not going over the cash flow or service firm. I do Q1 as well so there is no way they'd repeat in section B (don't blame me if they do
)
I'm going to go over published/incomplete (both methods) and maybe a bit of suspense and hope I'll be sorted with that.0 -
Just wondering, is anyone in the same position as me? I do Q1, not the 60 markers. Our teacher didn't cover ratios so I do Q6, 7 and I ALWAYS do Q9 over 8.
100mark questions have never come up 2 years in a row so, is anyone bothering to study cash flow / service firm? I really dont want to waste time going over them when they dont have any chance of coming up! Plus cash flow is such a horrible question
Yeah I'm the same, always do Q1. I'm not going over Cash Flow or Service, in fact I think I'm risking it with Published, Incomplete (both methods) and taking up Interpretation, which I still have yet to do, but I can't start looking over Tab and Suspense this late :P We briefly touched on it with our teacher but I'm going to learn the ratios just to cover myself. I'm also just focusing on Q9's, leaving out Cash Budgets 0 -
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