[John Moffat]

Increase in net assets = capital introduced + profit – drawings.

This is all explained Chapter 2 of our free lecture notes and in my free lectures working through Chapter 2.

[John Moffat]

As far as the calculation of the firms value is concerned it is the standard calculation of the PV of a growing perpetuity (which is the case here).

For the depreciation, although the depreciation itself is not a cash flow the question says that an amount equal to the depreciation is needed to maintain the current level of activity. This is very standard for the examiner these days and I do explain this in my free lectures.

[John Moffat]

I am not sure if I am looking at the same question as you. The only Paper AFM exam equation called Dricom is a very old question and was set in the December 1997 exam (not in 2010).

Thie question was a reorganisation and was not requiring a DCF appraisal – it was wanting to examine (and comment on) whether the reorganisation would satisfy the requirements of the various stakeholders.

The relevance of the tax is in order to calculate the profit after tax (i.e. the financial accounting profit after tax). We are not calculating the net cash flows because we are not required to calculate the present value and so adding back is not relevant.

[John Moffat]

We know that the bank statement is showing a balance of $200 Dr

However the cash account will be showing a different balance because of unpresented cheques, lodgments not yet credited, and any errors on the bank statement.

So what the question is asking for is what balance will be showing in the actual cash account, so you need to ‘work backwards’ from the bank statement to calculate this.

Hope that helps 🙂

[John Moffat]

I am afraid that it is wrong to simply multiply the std deviation by 5. It is the variance that must be multiplied by 5. (The reason becomes obvious by watching the Paper MA lectures on the standard deviation, but to be honest I would not waste your time but would just learn the rule)

[John Moffat]

I am afraid that it is wrong to simply multiply the std deviation by 5. It is the variance that must be multiplied by 5. (The reason becomes obvious by watching the Paper MA lectures on the standard deviation, but to be honest I would not waste your time but would just learn the rule)

[John Moffat]

1. I am sure for all of the books, but their website makes it clear before you order.

2. The discount code applies whether you order the hard copy or the e-book.

[John Moffat]

It is the last sentence of the paragraph underneath the details of the fixed costs. The fact that there is a tax credit automatically means that they can take advantage of it in the following year.

[John Moffat]

The credit note should have been credited to receivables but they have debited receivables by mistake (we would assume that the other entry (I.e. debit sales) had been done correctly.

So this is why the trial balance does not balance and so there is a suspense account.

To correct the error they would credit receivables with 800 (400 to cancel the wrong debit and another 400 to put the correct credit entry).
The double entry would then be to debit the suspense account with 800 which would clear the current balance on suspense of 800.

Have you watched m y free lectures on suspense accounts?

[John Moffat]

My AFM lectures do revise the Paper FM topics where relevant.

However the revision is only quick. So what I would suggest is that you start working through the AFM lectures but as soon as you come to anything that worries you then go back to the relevant FM lectures where it is explained slower and in more detail.

A lot depends on how much time you have for studying. If you do have the time then the ideal would be to work through the whole of our FM lectures first and then watch the AFM lectures. If you do do that then it is just the FM lectures on Working Capital that you do not need to bother with because they are not relevant for AFM.

[John Moffat]

Yes, it would get the mark 🙂

[John Moffat]

It is really hard for me to give advice to you.

All I can suggest is three things:

First, you say that you have been studying for 2 months, but have you watched our lectures? If not then you still have time to (and given that you have exemptions then it would really be worth watching our Paper FM lectures as well).

Secondly, in the exam itself do make sure that you right something for every part of every question. Even if you cannot complete a part of a question then you will still get some marks for writing anything at all sensible (and you only need 50 marks to pass the exam).

Finally, do have confidence in yourself when you go into the exam. There will be very many people less confident that you and will have done less studying than you. Never will everyone fail the exam and you will be one of those who passes it 🙂

[John Moffat]

Yes you should know them (you can find lectures on them in the Paper FA section of our website).

[John Moffat]

If there is a significant change in the gearing then we use the adjusted present value approach.

[John Moffat]

It is impossible for me to give you a definite answer, but if I were you I would book the exam, keep practicing up until the date, and go into the exam with confidence 🙂

[John Moffat]

The risk adjusted cost of capital for a project will normally be referring to that calculated using the assets beta of the project and is therefore accounting purely for the business risk (and not the gearing risk).

If both the business risk and the gearing risk change then we would use an adjusted present value approach (as explained in my free lectures).

[John Moffat]

You are welcome, and thank you for your comment 🙂

[John Moffat]

If you go to the following page you will find links to all of the videos in the correct order 🙂

https://opentuition.com/acca/fa/acca-financial-accounting-fa-lectures/

[John Moffat]

This is a Paper FA question rather than Paper MA.

Our free lectures on Chapter 9 of our lecture notes work through all of the relevant entries.

(I think also that you are confused between the purchase ledger and the purchases account. The ledger contains all the payables accounts.)

[John Moffat]

You are welcome 🙂

[John Moffat]

Big Data is certainly examinable (although not in enormous detail).
My ACCA (and, as I wrote before, our lectures) cover what is examinable, whether explicitly listed in the syllabus or not.

[John Moffat]

You are welcome 🙂

[John Moffat]

Although Section B of the exam will contain 3 questions – one on each of Budgeting, Standard Costing, and Performance measurement – these only account for 30% of the marks in total. The other 70% of the marks are from Section A and in this section there can be questions on all syllabus areas (and this does include Big Data).

It is therefore important that you do study all areas of the syllabus rather than concentrating just on certain topics.

Best is to watch our free lectures, which cover everything needed to be able to pass the exam well. In addition it is important to practice as many exam standard questions as possible and for this you should use the ACCA website and ideally an Exam kit from one of the Approved Publishers (BPP or Kaplan).

If you have any problems when working through our lectures or when attempting practice questions, then do ask in this forum and I will try to help 🙂

[John Moffat]

Certainly equivalent units are no longer examinable 🙂

[John Moffat]

Although the TAD is not a cash flow, it is allowable for tax.

So the tax is calculated after the deduction of the TAD, but in arriving at the cash flows it has been added back because there is not net cash flow.

If you are still unsure then you can find a lecture working through the whole of the question by scrolling down the following page:
https://opentuition.com/acca/afm/afm-revision-lectures/

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