Accounting and Financial Reporting

at Maastricht University

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++++++ Ask your AFR question here and an experienced Success Formula tutor will answer it as soon as possible ++++++ PLEASE ask your questions as a SEPARATE POST and NOT as a COMMENT here! Any problems or questions while studying/preparing for AFR? Don't worry, we got you covered! Just post any of your questions in the AFR course on Studydrive and our professional tutors will help you!!! We wish you lots of success! Your Success Formula Team
A is the amortized portion of the premium bond on Dec 31st 2017, wouldn't the unamortized portion (what the question is asking for) be D?
Hi Kyoshi, please find attached my calculation. The unamortized portion of the premium is the previous year carrying value of the premium - the part that is amortized. So A) should be the correct answer. Hope that helps! Your Success Formula Team - Lena
Can someone explain the type 1 et type 2 errors please
Type 1 = Conflict of interest between manager and shareholders Type 2 = basically when you elect friends or family to the BoD.
Thanks!
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Why is question 68) A)?
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what about the increase in Accounts Payable?
Hi Benny, Please find attached my calculation. As you can see from there, in this case the increase in Accounts payable is irrelevant! Success for the exam! Your Success Formula Team- Lena
if this question would have been legit, what would the calculations be to end up for answer D?
Here is the table. ( As it is amortized twice a year, I divide by two the rate)! In the exercice, you are asked the first interest payement, e.g. The interest expense. The first is 121 200 ( 3 030 000* 0.04)! Hope it helps ☺️
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how is 13 C ?
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For 13: It’s the Bond payable (3 Mio) + Premium (100k) + notes payable 5 year ( 165k) + the current portion of the mortgage payable (200k-15k). The other things mentioned are current and not long term liabilities!
And for 14 - see the calculation attached! Hope that helps! Your Success Formula Team- Lena
why isn't 22 B, because you've already used 2 months of rent. november and december
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I think because they ask about the amount of the adjusting entry.. since u would credit 3600 prepaid rent and debit 3600 rent expense, I think this is why it is c. Correct me if I am wrong..
Both explanations are correct :) for the full picture, I wrote down all the journal entries! Hope that helps! Your Success Formula Team- Lena
Any last-minute tips ? I just started studying an hour ago.
Why is it C and not B?
Hi again :) The insurance expense reflects a decrease in the prepaid expense account, whereas if you pay additional cash this would increase the prepaid expense account. In this case you are given a beginning and ending balance, as well as the decrease in the year. Knowing this you can solve for the increase - see the attached calculation. Hope that helps! Your Success Formula Team - Lena
why is it D?
Hi Amber, if 3% are deemed uncollectible, that means that 3% of the 1 Mio AR cannot be collected --> That is 30,000 . For the NRV, you calculate the Accounts Receivable minus the part that is uncollectible. So 1 Mio - 30,000 = 970,000. Hope that helps! Your Success Formula Team - Lena
Why is it C?
-250+160
Why is it B?
Hi Amber :) see attached my calculation. beginning balance in Allowance is the 102,000 (given), the ending balance is the the difference between the AR 975,000 and the NRV of 900,000. When accounts are written off, this results in a decrease in the Allowance. Recovering an amount results in an increase. Hope that helps. Your Success Formula Team - Lena
Why is it B?
Hi Amber :) Using the indirect method to calculate the CFO, you start of with Net Income and then make some reconciliations. So: Net Income + 85,000 Add back depreciation (nothing to do with operating activities) + 1500 Subtract increase in AR - 3000 (if AR increased, more sales on account were made than cash collected) Add the increase in AP (the expense was subtracted to arrive at net income, however no cash outflow) so + 1000 --> the other two (buildings, bond payable) do not affect CFO. So + 85,000 + 1,500 - 3,000 + 1,000 = 84,500. Hope that helps! Your Success Formula Team - Lena
Why is it A?
Hi Amber :) Please find attached my calculation. In order to answer this question, it is best to calculate an amortization table. The unamortized bond discount is equal to the previous balance of the bond - amortized part. The amortized part is the difference between the interest expense and the interest payment. I hope this helps! Your Success Formula Team - Lena
Why is it B and not D?
Hi Amber, Please find attached my calculation! Key here is the cost of the overhaul - since it is a major overhaul that extends the useful life of the asset, you can add the cost to the value of the asset. Your Success Formula Team - Lena
Why is FIFO generating more net income than LIFO?
Hi Amber, this is due to the fact that prices are increasing in that period. Under FIFO, whatever is there first (i.e. the cheaper products - as prices are increasing - so they are low at the beginning), will be sold first --> this is reflected in the COGS. Lower COGS result in a higher net income. Under LIFO, it is the exact opposite way --> so the newer, more expensive products are being sold, hence the COGS is higher and net income lower. Hope that helps. Your Success Formula Team - Lena
Why is it A?
Why is it C?
3,000,000(5 year bond)+100,000(premium on bonds)+165,000(Notes payable 5yr)+200,000-15,000(Mortgage payable- which are due currently)
Why is it A and not C?
my guess would be because there is an estimation of the liability and because the customer has a more than probable chance of winning the case ..
Consider the following transactions: I. Borrowed cash on a note payable, €80,000 II. Provided services on account, €10,000 III. Received cash from a customer as payment on account, €8,000 IV. Received a utility bill, €1,200 Total assets are increased by: A) €98,000 B) €96,800 C) €88,000 D) €90,000 Can someone explain me please why is it D not A?
Hi Rihards, I. Borrowed cash -- > Cash (A+) 80.000 II. Services on Account, --> Accounts Receivable (A+) 10,000 III. Received Cash from a customer as payment on account --> Cash (A+) 8000 but at the same time Accounts Receivable (A-) 8000 --> so net effect 0 IV. Expense and payable --> no effect on assets! So the total effect is 90,000 Hope that helps :) Your Success Formula Team - Lena
Thank you : )
what are the exact variables for when a bond has a discount or premium and how can you recognize if this decreases or increases?
Hi Simon, On the picture attached you find a quick overview. I also made a small graph for a "discount" bond. As you can see in that graph, if a bond is issued at a discount, the issuance price is below the face value of the bond. The difference is what we call the Discount. At the end, so at maturity of the bond, you however have to pay back the face value --> that means that over the maturity of the bond, the discount is decreasing. For a premium, it is the other way around - so issuance price > face value and the premium is decreasing. Hope that helps! We wish you success :) Your Succes Formula Team - Lena
Why is it D?
Cash increased (+80,000) Service Revenue on account = accounts receivable (+10,000) Cash increased (+8,000) BUT accounts receivable decreased (-8,000) Utility bill is a liability increase, but has no effect on assets ((I think))
Yes absolutely correct! :)
Why is it C?
Hi Amber, Issued shares + 80.000 Service Revenue + 10.000 Depreciation Expense (decreases Equity) - 2000 --> total of 88.000 The other transactions have no effect on Equity, rather they affect the asset side of the balance sheet. Hope that helps! Your Success Formula Team - Lena
how do we get to the answer question 43 ?
Hi Noam, see attached the calculation :) Hope that helps. Your Success Formula Team - Lena
how do we get to the answer for question 35 ?
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And for 36: They are looking for gross profit which is: gross profit = revenue - COGS you first calculate how many good are available for sale - which is 82. Since you have ending inventory of 20, you know that you actually only sold 62 items. This is important for the calculation of the revenue: Revenue = Items sold * selling price. --> so Revenue 62 * 20 = 1240 For the COGS: you first calculate the weighted average per unit cost (as you see on the calculation attached) and then you multiply the unit cost (14.2) * number of units sold (62) Then you have gross profit = 1240 - 880.1 = 359.9 Hope that helps. Your Success Formula Team - Lena
thank you !!!
Can someone briefly explain the reasoning ?
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Hi Lucie, I attached the calculation below. If you need more explanation, let me know. Much Success - Your Success Formula Team
thanksss !!!
Where does this 3,114,106 come from ?
Hi Lucie, It is the original price of the Bond minus the Premium amortisation (10634). As a result, 3,114,106 is the new carrying amount of the Bond. We wish you success ! Your Success Formula Team - Florian
It is the current carrying value - which is the carrying amount previously (3,124,740) - the amortized portion (10 634) Hope that helps! Your Success Formula Team - Lena
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Hey, can someone briefly explain why Q29 is A) ?
6% x 50 000 = 3000 So, in one year from now, you have to pay 3000€. So in December (7 months later), you should pay 3000/12 x7 = 1750€
Thank you :) I calculated with 6 months...
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Version R ?
Can someone please explain how to get the answer ?
assets = liability + shareholders' equity --> so we can calculate total shareholders' equity by Total Assets - Total Liabilities = 152,000 - 77,000 = 75,000. We now know that Capital + Retained Earnings = Total shareholders' equity this solves for 30,000 + x = 75,000 . x=45,000
Thanks :)
Can someone explain the reasoning to find answer B please ?
(900/0.07)-(50-35), its is the ending provision formula in the book
The Quizlet is amazing. Thank You!!
No worries! :)
Is anyone out there that has done the second task of the course assignment and that is able to to save me from a sure fail by uploading it?
Schon!
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Hi, what's the meaning of the highlighted parts? Was that on the first sit exam?
They are not necessarily on the first sit exam. But I thought that these are concepts were extra important, and should really be known. It turned out that most were on the first sit exam, but there is no real connection.
Hey There, are There Some peeps Who has to do the course assignment for accounting ?? I need some helppp
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Moreee
I also already finished part 3 so let me know if you Need Nah help There !
Could someone explain again how to file a complaint about the exam. I would like to complain about a few things but i cant figure out how....Thanks guys!
Go to course details, examination materials and then exam comments
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In version R Question 35 - isn't D the correct answer?
I'm pretty sure that A is actually correct . The correct answer is 600, which is A in version R (unless I made a mistake in my notes)
fuck version S
Same goes for K
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'Corporation: provides the least amount of protection' -> Doesn't a corporation provide the highest amount of protection? Because the owners are not liable?
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Ah i got what you mean. So it’s the least protected for investors but highest protection for company owners
page 570 if u want to understand everything
Can someone explain why it is B here? when I compute everything I've got 3,160
You depreciate 6,500 each year from 2013 to 2016. This leaves you with a depreciable amount of 6,500 and 6,000 in residual value, so 12,500 in total. You subtract the new residual value, leaving you with 10,000 to depreciate over 3 more years. 10,000/3 = 3,333
oh right I didn't see that we were using straight-line here! thank you!
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Maybe someone know why C is the correct in 67? :)
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You're the light in the midst of darkness
For the exam is dark and full of terrors
Preach
Why is it A?
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Based on the structure of the income statement, you should know that: Sales - COGS - Selling administrative expenses - Depreciation = Earnings before interest and taxes. 100 000 - COGS - 10,000 - 10,000 = 20,000 Solve for COGS - COGS = 60,000 Does that clarify it? :)
Yes thank you! :)
Why is it B?
I have also posted the calculation in the answer to another comment, see below!
Someone can explain?
Dear Anonymous Trump, based on the Accounting Equation you know, that Assets = Liabilities + Equity Total Assets = 51,000 Liabilities = 31,000 that means that Equity needs to be 20,000. Equity consists of Share Capital (this is what they are looking for in the question) and Retained Earnings. The Retained Earnings you can calculate: Beg. Balance Retained Earnings + Net Income - Dividends = End. Balance Retained Earnings Beg. Balance = 0 since it is the first year the business is running Net Income = 14,000 Dividend = 0 (given in the description) So End. Balance Retained Earnings = 14,000 so: Share Capital + Retained Earnings = Total Equity Share Capital + 14,000 = 20,000 Share Capital = 6,000 Hope that helps! Your Success Formula Team - Lena
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How to compute 10?
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Thank you :)
thank you!
Hello, why is it 4000 since we already paid 2 months which will debit the prepaid insurance account by 2000?
Hi Anonymous Bang! The entries are: November 1st: Dr. Prepaid Insurance (A+) 6,000 Cr. Cash (A-) 6000 December 31st - 6,000 Euros for 6 months, so 1,000 Euros per 1 month, 2 months have passed. Dr. Insurance Expense (SE-) 2,000 Cr. Prepaid Insurance (A-) 2,000
 The question asks for the ending balance in Prepaid Insurance, so it is 6,000 - 2,000 = 4,000. Hope that helps. Your Success Formula Team - Lena
Why is depreciation a deferral adjustment. Isn't it a separate adjustment category?
No, it belongs to the deferral adjustments
It is a so-called long-term deferral - you first have the cashflow when you buy the asset, and then over time you recognise the expense using depreciation.
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