CMA Part 1 Unit 1 (2021)
CMA Part 1 Unit 1 (2021)
CMA Part 1 Unit 1 (2021)
Time Horizon = The time horizon for FA is "Past" generally it is one accoun
MA there is no time horizon as specified
Other Points
F/S should be prepared in accordance with the concept of Going Concern (our
indefinite time/ foreseeable future)
Note - when we prepare F/S we can use the following
1- Net Realizable value (Receivables, Inventory)
2- Present Values (Lease Receivable/Payable)
3- Historic Cost (land)
4- Market values (Investment in stock/bonds of other company)
5- Replacement cost(is the cost of brand new item) (inventory)
Note- Wenever use Liquidation value when we prepare the F/S
Accrual Concept
Users of Financial Statements
Note
Financial Statement Relationships
1.2 Statement of Financial Position (Balance Sheet)
1.3 Income Statement= Reflect the Operational Information(P/L)
Note
1- Single step I/S
(Revnue + Gains) xxx
Less (Expenses + Losses) (xxx)
NI/NL xxx
Note If issue price is not given, Market price at the date of issue will be taken
3- Stock Dividend
Example
Co have old Issued stock = 10,000 Stocks
Now Co is planning to issue new Stock as dividend = 1000 Stocks
step #1
We need to calculate the % of new issued stock
% of New Stock = (new stocks / old stocks x 100%)
10%= 1000/10000 x100%
Other Adjustment
W-1
Sale price of asset 200
less Carrying value of asset -100
Gain on Disposal/(Loss) 100
If SP > CV = Gain
If SP < CV = Loss
Sale Price/proceed = CV + Gain Or CV -loss
company)
ventory)
mation(P/L)
150
-90
60
sue will be taken as issue price
000 Stocks
ANCIAL FLEXIBILITY
xxx/(xxx)
xxx/(xxx)
xxx/(xxx)
xxx/(xxx)
xxx
xxx/(xxx)
$
$1,000
200
0
-100
0
or Loss
(W-4)
0 2019 2020
50 100 80
100
0
xxx
xxx
(xxx)
xxx
200
-100
100
xxx
xxx
(xxx)
xxx
stment
w in Investing Activities
$
W-1 1000
W-2 -500
-220
500
0
500
-100
500
1680
activates
OR
$
Inflow 1900
Outflow -1500
Inflow 1000
Outflow -600
Outflow -200
Outflow 0
600
$1,050
$1,060
$600
$2,710
$300
$3,010 This should be equal to cas
payables
Interest payable
expense (From I/S)
nterest payable
d be equal to cash balance in balance sheet
2019 2020
150 100
Dec by 50 (outflow)