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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
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!
'Corporation: provides the least amount of protection'
-> Doesn't a corporation provide the highest amount of protection? Because the owners are not liable?
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
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? :)
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
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-) 2,000â€¨
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
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.
Hi Alexandre,
Company ABC purchased the machine on 01/01/2016 for 900,000 -useful life 6 years, no salvage value --> that gives you an annual depreciation expense of (900,000/6) = 150,000.
On 01/01/2019 - the net book value of your asset is then 900,000 - 3 * annual depreciation expense (since three years have passed).
So, 900,000 - 3 *150,000 = 450,000
Based on this new book value, you can then compute the new depreciation expense. With the revision in the useful life, the asset can be used for 5 more years.
450,000 / 5 = 90,000
Hope that helps.
Your Success Formula Team - Lena
How many units are left in the end?
Beg. Inv. + Purchases - Sales Rev. = End. Inv.
50 + 90 -100 = 40 units left
Under FIFO, the cost of ending inventory is always based on the latest costs incurred. FIFO goes from bottom to top, so basically the last 40 units fall into the 90 units from the purchases. Meaning that the last 40 units are valued at 9â‚¬ per unit. *
40 x 9â‚¬ = 360â‚¬
* To clarify if we had 100 units left, 90 of them would be valued at 9â‚¬ per unit and 10 units at 8â‚¬ per unit.
Shouldn't cash sales be Sales on account instead? At least thats the formula given in the trial exam, same for the formula cash collected from customers.
I think it is since the course manual says everything talked about in the lectures and tutorials is relevant... I'd personally consider the agency theory & auditing the two most important topics, the rest is pretty straightforward and shouldn't be to difficult in terms of the exam questions.
Hi! First of all thank you very much this is so helpful! I have a question, I've seen this formula and the same formula where you also subtract write-offs in the book. But I was wondering why sometimes you have to subtract write-offs and sometimes you don't? Thanks :)
Yes, I think that could be. And you mainly need change in receivables to calculate receipts from customers and the formula for that can be simply put as (Revenue- Change in receivables) and change in receivables already includes deduction of write-offs. I'm not sure if that answers the question though hahaha
Warranty expense is the expense that has incurred because of the warranty. The provision is just a liability to pay the warranty and will later be transferred into a cash payment.
you calculate the age of receivables:
92000 x 0.03= 2760
36000x 0.05= 1800
23000x 0.08= 1840
14000x 0.2 = 2800
then you add all the sums up and it gives you 9200. After that you subtract 3200 (cr.) which is given and it gives you 6000. Hope that helps xx
Exam Relevant Chapters for Accounting and Financial Reporting! Hope this helps (and meet your expectations lol)! If you have any questions or notice any mistakes please let me know :D