Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 13MJ, Problem 1IFRS
(a)
To determine
Revenue:
Revenue is the earnings from operations of a business. The operating activities are sale of goods and services, and rent revenue.
Generally Accepted Accounting Principles (GAAP):
They are commonly known as GAAP. It is a collection of generally practiced and followed rules and standards of accounting. GAAP provides global guidelines for preparation and disclosure of financial statements of public companies. It is created and developed by International Accounting Standards Board (IASB).
To explain: The meaning of ‘turnover’ reported in the consolidated income statement.
(b)
To determine
To explain: The differences in the presentation of income statement of Group U and MJ International
(c)
To determine
To explain: The presentation of net finance costs’ subtotal at the top of the column than that would be presented under GAAP
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Students have asked these similar questions
The following financial information is related to Sheffield Group, a service company.
Revenues
€ 896,000
Income from continuing operations
112,000
Comprehensive income
134,400
Net income
100,800
Income from operations
246,400
Selling and administrative expenses
560,000
Income before income tax
224,000
Compute the following:
(a)
Other income and expense
€ enter an euro amount
(b)
Financing costs
€ enter an euro amount
(c)
Income tax
€ enter an euro amount
(d)
Discontinued operations
€ enter an euro amount
(e)
Other comprehensive income
€ enter an euro amount
The income statement for a British company, Avon Rubber plc, is presented as follows. Avon prepares its financial statements in accordance with IFRS.
Avon Rubber plcConsolidated Income Statement(pounds in thousands)
Current Year
Prior Year
Continuing operations
Revenue
107,600
117,574
Cost of sales
(77,892)
(89,256)
Gross profit
29,708
28,318
Distribution costs
(4,832)
(4,527)
Administrative expenses
(13,740)
(14,536)
Other operating income
—
—
Operating profit/(loss) from continuing operations
11,136
9,255
Operating profit/(loss) is analysed as:
Before depreciation, amortization and exceptional items
15,723
13,577
Depreciation and amortization
(4,587)
(4,322)
Operating profit/(loss) before exceptional items
11,136
9,255
Exceptional operating items
Finance income
5
16
Finance costs
(486)
(985)
Other finance income
(443)
(1,152)
Profit/(loss) before taxation
10,212
7,134…
Financial ratio analysis provides us with a useful tool to assess the performance of a logistics company.
Below is an extract of the financial statements of ABC Logistics Company for the years ended
31 Dec 2003 and 31 Dec 2004. (All figures in million ZMK)
Profit and Loss Account for the year ended 31st December
2004 2003
Revenues 5,000,000 5,000,000
Less: Cost of goods sold (4,000,000) (4,500,000)
Gross Profit 1,000,000 500,000
Less: Interest expenses (100,000) (80,000)
Other operating expenses (400,000) (370,000)
Net Profit…
Chapter 13MJ Solutions
Financial & Managerial Accounting
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