Section D

Date: 2015-10-07; view: 666.

• Read the following financial statement from an annual report and

then answer the questions which follow.


	WallersBank plc
Consolidated Profit and Loss Account
31st December 1990
	£000	£000
Profit before tax, after provisions for doubtful debts	24 541	23 863
Tax on group profits	14 395	13 389
Profit after tax	10 146	10 474
Dividends paid	3 250	3 250
Retained earnings	6 896	7 224
Earnings per share	13p	15p

1. What term tells you that this is a statement of income?

2. Do the figures relate only to one bank or to one bank and its subsidiaries?

3. What was the increase in taxable profits from 1989 to 1990?

4. How much more tax did the bank pay in 1990 than in 1989?

5. What is the difference between the 1990 and 1989 figures in terms of the profits which the bank has kept?

6. Are these figures before or after money put aside for possible credit losses?

• Look at these questions and answer them when you have read the

accounts on the opposite page.

1. Which two specific items on the balance sheet showed the main

growth?

2. What was the percentage increase in total assets from 1989 to

1990?


	WallersBank pic
Consolidated Balance Sheet
31st December 1990

	£000	£000
Assets
Cash and due from banks	254 095	235 809
Loans to banks and public bodies	1 159 082	998 129
Investment securities	598 820	572 21 8
Advances to subsidiaries	4 795	3 856
Leased assets	15 867	15 024
Acceptances for customers	530 723	409 820
Premises and equipment	95 415	89 845
	2 658 797	2 324 701
Liabilities
Current, deposit and other accounts	1 869 952	1 667153
Deferred taxation
Proposed dividends	1 983	1 071
Acceptances for customers	530 723	409 820

Capital Resources
Share capital	40 000	40 000
Reserves	135 658	128 489
Minority interests	6 687	4 709
Loan capital	55 742	58 371
	2 658 797	2 324 701

• Look at the balance sheet again and answer these questions.

1. "What term tells you that these figures show the total financial position of the bank at the end of 1990?

2. What is the value of all things owned by the bank which could be used, if necessary, to pay debts?

3. Which sum includes the £5 million which the bank has lent to the City of Birmingham Local Authority?

4. What is the total value of the things such as shares and treasury bills which the bank has bought with the intention of making a profit?

5. What was the increase from 1989 to 1990 in the amount of money which the bank lent to companies which it owns?

6. What is the value of all the property such as buildings, land, motor cars, computers and so on which the bank owns?

7. What is the value of the property which the bank lends to its customers for payment?

8. What is the total value of the debts owed by the bank?

9. Which is greater, and by how much, the taxes which the bank paid in 1990, or the money put aside in 1990 which the bank calculates will soon be needed to pay taxes?

10. If all of the issued shares are paid up and there are 20 million shares at £1 each, how much each did the remaining five million shares cost?

11. How much more money was put aside in 1990 than in 1989 to cover unexpected events?

12. Which term relates to those shares which Wallers do not themselves hold in their own subsidiaries?

• Read through the following information.

Three banks. A, B and C, all issued their financial statements for the 1990 financial year at the same time, in each case, the sum of the retained earnings and dividends adds up to the profit after taxation. Bank B reported a profit after taxation of £16 million. Half of this sum was paid as dividends. The bank with total assets of £1.5 billion paid dividends amounting to £5 million. One of the banks paid dividends which were £1 million higher than those of Bank B. The same bank had total assets which were twice as large as those of Bank A. Half of Bank A's profit after taxation was kept as retained earnings. Bank C posted a profit after taxation which was double that reported by Bank A.

• Given this information, work out the following:

Which bank had total assets of £2 billion?

Which bank showed retained earnings of £11 million?

• Match the terms (a-t) below with their definitions (1-20)

1. Company in which another company owns more than half the shares 2. Periodic examination of financial records 3. Buildings and the land on which they stand 4. Report detailing the company's activities in the past financial year 5. Payment as an agreed percentage of price 6. Movement or development 7. Profits after transfers to reserves 8. Money overdrawn on a bank 9. Hiring something to a user, instead of selling it 10. The total obtained from adding up a column of figures 11. Something which you own, which you use to pay a debt 12. A method of financing international trade 13. Short-term documents normally sold by big US corporations 14. The buying of a majority of shares in a company 15. Money spent on running a company 16. Charge made for service 17. Money put aside in case anything unexpected happens 18. Document promising to pay a sum of money at a specified period 19. Differences between income and outgoings 20. A sum of money lent

a) earnings b) overdraft c) footing d) asset e) subsidiary f) documentary credit g) profit h) take over i) commission j) trend k) expenses l) leasing m) audit n) fee o) bond p) loan q) annual report r) commercial paper s) premises t) reserves

• Match the form of revenue (1-11) with the right recipient (a-k).

grant salary wage commission fees dividend royalty stock option pension tax redundancy pay

a) b) c) d) e) f) g) h) i) j) k)

author senior manager laid off employee government blue-collar worker retired employee sales representative student consultant shareholder white-collar worker

<== previous lecture	\|	next lecture ==>
Section B	\|	Vocabulary notes

lektsiopedia.org - 2013 год. | Page generation: 0.444 s.