cash flow forecasts - E

Question 1

statement of comprehensive income

Answer 1

calculates whether or not the firm has made a profit or a loss by deducting all expenses from sales revenue
- sales revenue = quantity sold x selling prices
- costs of goods sold = opening inventory’ + purchases - closing inventory
- gross profit = sales turnover - costs of goods sold

Question 2

statement of financial position

Answer 2

calculates the net worth of a business by balancing what the business owns against what it owes

Question 3

calculation for profit for the year

Answer 3

-gross profit - expenses + other revenue inc
-gross profit = sales revenue - costs of goods sold - costs of goods sold = opening inventory + purchases - closing inventory
- profit or loss for the year = gross profit - expenses + other income

Question 4

straight line depreciation

Answer 4

an asset is depreciated by a set amount each year
equation:
historic value - residual value
——————————————–
expected life

Question 5

reducing balance depreciation

Answer 5

an asset is depreciated by a percentage of its remaining value each year