Class1_Cascino

AC 330Class 1, Week 3

Financial Accounting, Analysis and ValuationDr Stefano Cascino

2010-2011

Dr Stefano Cascino AC330 2

Details

• Class Teacher: Dr Stefano Cascino - “Stefano”• Office: OLD 3.32• E-mail: [email protected]• Office Hours:

– Tue 8.30-9.30– Thu 8.30-9.30

• Administrative Contact: Mr Justin Adams– Office: OLD 3.20– E-mail: [email protected]


It’s your turn now…

Introduce yourself!


Setting the “game rules”…

• Handouts:– By email after class

• Class Attendance:– Compulsory: absence should be exceptional– “Absent with reason”: Email before class with a “sound”

motivation• Attending other classes:

– Only once per term, email before class with a “sound”motivation

– Confirmation of presence (and permission!) via email by other class teacher required


Primary objectives

• The objectives of our class are:– Not to overload you with irrelevant assignments and

make you feel unhappy!– To provide you with applied knowledge of fundamental

issues in financial accounting– To discuss “hot” topics that companies face nowadays in

a fun and enjoyable class environment– To help you learn how to prepare and use financial

accounting information


Class format

• How to make the most out of our class:– Be always prepared! Do you homework (I will be checking your

weekly assignments). Time is a scarce resource…– Be proactive! No worries for bad answers, you are here to learn!

• Class structure:– Cooperation– Discussion– Group work (maximum 4 students)– Class presentation– Be ready to discuss/defend your (or your group’s) analysis– Rules: Raise your hand to talk, avoid personal attacks (it’s just

accounting!)


Today’s Class

Soloakk Limited


How to deal with an assignment?

• Take a deep breath…• Read it at least twice!• Take notes of the main assumptions and relevant

information• Find the link between the questions asked and the

information provided• Read again!• …and you will easily solve it!


Requirements

• Income statement (P&L)• Statement of comprehensive income• Statement of financial position (Balance sheet)


Income statement (I)

£ 300Cash sales not banked

£ 243,100Tot.

£ 242,800Cash sales banked

£ 161,400Cost of sales

£ 15,000(-) Inventory at year-end:£22,800*100/150=£ 15,200Scratched goods at cost£1,200*100/150=£ 800Net realis. value £ 600Write down £ 200

£ 176,400Total purchases

£ 18,100Creditors at year-end

£ 158,300Amount paid to suppliers


Income statement (II)

£ 4,000Tot.

£ 3,000Loan interest: £ 30,000*10%

£ 1,000Overdraft interest

£ 33,000Wages & salaries

£ 2,400Electricity

£ 55,000Tot.

£ 1,700Prelim. expenses written off

£ 53,300Tot.

£ 1,500Depreciation: £ 15,000*10%

£ 2,000Audit

£ 2,400Sundry expenses

£ 4,000Rates

£ 8,000Rent


Statement of comprehensive income

• Do we have here “clean surplus accounting”?


Statement of financial position

£ 2,000Rent prepaid

£ 23,300Tot.

£ 2,000Audit fee

£ 3,000Loan interest

£ 200Electricity

£ 18,100Suppliers

£ 6,000(-) Dividends paid

£ 7,900Tot.

£ 13,900Profit for the financial year


Next week…

• Amazon• Individual work• Be well prepared!

Enjoy the rest of your week!

Class1_Cascino

Documents

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