I think you are confusing accruals with accrued income. Accruals are expenses that need to be recognized but they are not yet invoiced (just a high level explanation). The entry is:
Dr Expenses (Income Statement)
Credit Accruals (Balance sheet)
Accrued income is income generated but not yet received. The entry is:
Debit Accrued Income (Balance sheet – It’s an asset)
Credit Revenue (Income Statement)
Chances are that you refer to a credit on the balance sheet so it’s a liability (amount that needs to be paid) for an expense that has been incurred.
Can you be a bit more specific? You can get it if you know the depreciation per year and how many years the project will be running for.
For example, if you have a project that will run for 4 years, the initial cost is $100,000 and you depreciate your asset by $20,000 per year, then the scrap value will be:
$100,000-4*$20,000= $20,000
Yes, the financing activities include the dividends that a company has paid. However, the dividends that a company has received from investments are included in the investing activities.
Chances are that that you won’t be able to find it from the balance sheet alone. The reason for that is that if the dividends have been fully paid, there is no liability and therefore nothing is recorded on the balance sheet.
That’s actually partially correct. Dividends are incorporated in the retained earnings since there are deducted from the retained earnings account. To be more specific, you can find the dividends by using the following formula:
Opening Retained Earnings= Closing Retained Earnings -Profit for the year (from the P&L) – Dividends
The above formula assumes no other adjustments in the retained earnings. The best way to find the dividends is from the notes and more specifically from the reconciliation of the reserves.
There is more than one way to calculate but the common approach is to use the long term interest bearing debt or in other words the loans or debentures that the company uses to finance it’s operations as the numerator. The denominator is the equity section that you can get from the balance sheet.
In other words the formula is : Interest Bearing Long Term Debt/ Equity
The formula for the interest rate parity is the following:
Forward rate= (spot rate*(1+ foreign interest rate)/(domestic interest rate).
There are certain assumptions that need to be true for this equation to hold true though (such as complete markets etc.)
