Lesson 15 Third Conditional

8/11/2019 Lesson 15 Third Conditional

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Understanding a Balance

Sheet


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Basic Principles of a Balance

Sheet Most businesses borrow money to help them

to operate.

A balance sheet has a special sectioncalled

liabilities. This shows how much money hasbeen borrowed or investedand where it came

from.

The term balance means that all the money

invested or borrowed must be accounted for inanother section, called assets.


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What are Assets?

last a long time e.g., buildings, vehicles, computers.

cost a lot of money.

could be sold to increase capital (i.e. money owned

by the business).

Fixed assetsare items owned by the company

which:


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What are Assets?

Current assetsinclude:

Items used and replaced regularly e.g., raw

materials or stock.

Customers who owe money (called debtors) forgoods they have bought.

Money in the current bank account.


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What are Liabilities?

Current liabilitiesare:

Money the business owes to suppliers (called

creditors) for goods purchased on credit.

Short term loans.


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What are Liabilities?

Liabilitiesalso includes capital and reserves.

Share capitalis money which shareholders have

invested in the business. Reserves= profit from previous years which has

been kept to finance future developments.

Profit and loss account= money kept back from

the current years profits.


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The structure of a Balance SheetAssets

Fixed assets Buildings 60,000

Equipment 20,000

Total fixed assets 80,000

Current assetsStock 20,000

Debtors 10,000

Cash at bank 10,000

Total cu rrent assets 40,000

(Total assets = 120,000 but this figure doesnt show)


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The structure of a Balance SheetCurrent liabilities

LIABILITIES

Current liabilities

Creditors -10,000

Work ing Capital 30,000

(This is the current assets - 40,000 - minus the current liabilities)

Total Net Assets 110,000

(This is the total assets - 120,000 - minus the current liabilities)


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The structure of a Balance SheetCapital and Reserves

Financed By:

Accumulated Fund 70,000

Surplus of Income 40,000

Capital Employed 110,000

(This is the total amount in Capital and Reserves. It must equal

the same amount as the total assets minus current liabilities).


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Putting it all together

ASSETSFixed assets (assets listed)

Total f ixed assets

80,000 A

Current assets (assets listed)

Total cu rrent assets 40,000 B

LIABILITIES

Current liabilities 10,000 C

Working Capi ta l 30,000 B C

Total Net As sets 110,000 A + B C

Financed By: (all listed)Capita l Emp loyed 110,000 D


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Reading a Balance Sheet

Both the balance sheet and the profit and loss

account show the health of the business

Shareholders, customers, suppliers, employeesand other groups of people will be interested in

both types of account.


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Key aspects of a Balance Sheet

Fixed assetsis there enough money secured

in items which could be sold to raise capital?

Cash in bankis there enough to cover a short-

term crisis? Working Capitalif this figure is negative, the

business hasnt enough money to pay all the

creditors in a reasonable time.

Shareholders fundsare these increasing?Shareholders want their investment to grow.


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Contents of Profit and Loss

Account Revenues : Turnover

Other income

Sale of fixed assets Expenses

Profit / Loss


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Revenues

Revenue is defined as the income that

accrues to the firm by sale of goods and

services or through investments

Sales Revenueis the amount earned

through sale of goods/services

Gross sales is the total sales, while Net

sales is gross sales minus the trade

discounts


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Revenue (Contd.)

Other incomeis earned through othersources of investments

Examples: Interest, dividend, royalty,

commission, fee, etc Sale of Fixed Assets are the revenues

which come into the business when

unused / unwanted assets are sold andmoney recovered by the company


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Expenses

The cost of earning the revenues are the

expenses

Examples: variable expenses like cost of

manufacture, cost of selling, fixed

expenses like salaries, administrative

expenses


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Expenses (Contd.)

Cost of goods consumed

This is the value of the inputs used to

manufacture the final product

It is calculated as

Opening stock

+ Purchases- Closing Stock


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Expenses (Contd.)

Manufacturing expenses

These include all expenses related to plant and

manufacturing operations like power and fuel,

repairs and maintenance, stores consumed,water consumed, etc

Excise Duty

This is the amount paid to the Govt. as a tax,before the goods are dispatched from the factory


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Expenses (Contd.)

Salaries and Wages

These are the cost of labour and otherstaff and will also include all other

employee benefits and amenities. The other benefits include Provident Fund,

ESI contributions, medical benefits, LTC,

bonus, gratuity, pension, othersuperannuation benefits, etc


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Expenses (Contd.)

Administrative Expenses

These include office expenses, secretarial costs,

postage and telephones, directors remuneration

and other administrative expenses Selling Expenses

These include freight, advertising and sales

promotion, commissions and discounts andother selling and distribution costs


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Expenses (Contd.)

Interest

The interest costs consist of interest on longterm loans, debentures, bank loans for working

capital, interest on public deposits and otherloans

Depreciation

This represents a non cash expenditure as it is

only an accounting provision. This amount is notpaid to an outside party

Other expenses

This includes auditors remuneration, petty

expenses, donations, etc


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Profit / Loss

The difference between the revenue andexpense is profit

When expense exceeds the revenue, the

company ends up with a loss. PBID: Profit before Interest and

Depreciation

PBT: Profit before Tax PAT:Profit after Tax


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The Profit Appropriations

Profit after Tax (PAT) is available for

appropriations for

Debenture Redemption Reserve

General Reserve

Dividend on Preference Share

Dividend on Equity Share


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Profit or Loss carried over

After appropriating the taxes and

dividends, the balance surplus is

transferred to Reserves and Surplus in the

Balance Sheet

The net loss reduces the Reserves and

Surplus in the Balance Sheet


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IF CLAUSES: THIRD

CONDITIONAL


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Conditional sentences describe situations that

occur (or do not occur) because of certainconditions.

In conditional sentences, the clauses can come in

either order.We place a comma after the if clause

if it is comes first.We dont generally place acomma after the result clause if it comes first.


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There are five types of if clause:

TYPES OF IF CLAUSE

Type 0

Type 1Type 2

Type 3

Mixed Type


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Type 3

This is the only type of condition which deals

with past situations. The action mentioned

did not really happen.

***If + past perfect + would have verb3

e.g. If it had rained yesterday, I would havestayed at home.


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Basic structures used in conditional sentencesSituation If Clause Main Clause

True in the present/

future

Simple present Simple present

Simple future

Untrue in the present/

future

Simple past Would + verb 1

Untrue in the past Past perfect Would + have verb 3


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EXERCISES

1.If I ___(be) stronger, I'd help you carry the piano.

2.If we'd seen you, we ___(stop).

3.If we ___(meet) him tomorrow, we'll say hello.

4.He would have repaired the car himself if he___(have) the tools.


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5.If you drop the vase, it ___(break).

6.If you hadnt studied, I ___(not pass) the exam.

7.I wouldnt go to school by bus, if I ___(have) a

driving licence.

8.If she ___(not see) him everyday, shed be

lovesick.

Answers:1)were 2)would have stopped 3)meet 4)had had 5)willbreak 6)would not have passed 7)had 8)didnt see


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EXERCISES

1.If I ___(be) stronger, I'd help you carry the piano.

2.If we'd seen you, we ___(stop).

3.If we ___(meet) him tomorrow, we'll say hello.

4.He would have repaired the car himself if he___(have) the tools.


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5.If you drop the vase, it ___(break).

6.If you hadnt studied, I ___(not pass) the exam.

7.I wouldnt go to school by bus, if I ___(have) a

driving licence.

8.If she ___(not see) him everyday, shed be

lovesick.

Answers:1)were 2)would have stopped 3)meet 4)had had 5)willbreak 6)would not have passed 7)had 8)didnt see


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WISHES


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a)wish + would / couldTo express a wish about the future.

e.g. I wish you would change your mind about

buying that house.

I wish she could visit us.


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b) wish + simple pastTo express a wish about the present.

e.g. My wife wishes I helped her with the housework.

I wishI lived in a big city.


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**If onlyhas a meaning similar to that of wish.If only

is followed by a noun clause without that.e.g. I wish (that) I were good at sports.

If only I were good at sports.

**Use simple past after if onlyto express a wishabout something that is contrary to fact at present.e.g. If only we werent so busy.

**Use past perfect after if onlyto express a wish thatsomething had happened differently in the past.

e.g. If only I hadnt said that.


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Be careful!Dont confuseif onlywith only if.

e.g.If only Jerry studied more.

( = I wish he would study more.)Only if Jerry studied more would he have a

chance of passing.

( = This would be the only way for him topass.)


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Basic Structures Used in Wish Clausessituation

Subject + wish

main clause

A wish about

the future

would +verb1

A wish about

the present

verb2

A wish aboutthe past

verb3


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c) wish + past perfectTo express a wish about the past.

e.g. My son wishes he hadnt takenthat job.

I wish you had told me about the dance.


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**If onlyhas a meaning similar to that of wish.If only

is followed by a noun clause without that.e.g. I wish (that) I were good at sports.If only I were good at sports.

**Use simple past after if onlyto express a wishabout something that is contrary to fact at present.e.g. If only we werent so busy.

**Use past perfect after if onlyto express a wish thatsomething had happened differently in the past.

e.g. If only I hadnt said that.


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Be careful!Dont confuseif onlywith only if.

e.g.If only Jerry studied more.

( = I wish he would study more.)Only if Jerry studied more would he have a

chance of passing.

( = This would be the only way for him topass.)


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EXERCISES1.What a beautiful view! I wish I (bring) ___ my

camera with me.

2.If only Mr. Blake (not, interrupt) ___ the speaker

all the time, the presentation would have been

enjoyable.

3.I quite like this flat, but I wish the people above

us (not, be) ___ so noisy.

4.If only I (have) ___ better eyesight.I cant read

anything now without my glasses.


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5.Later on today, I ---- a cake for tea if we---- all of the necessary

ingredients , of course.

A) would bake/were having

B) will bake/have

C) could have baked/had

D) will have baked/have had

E) were to have baked/would have

6.If people ---- any opium-related drug often enough, they ----

physically dependent, or addicted, to the drug.

A) take/become

B) took/became

C) would take/had becomeD) were taking/may become

E) are taking/have become

Answers: 1C-2D-3A-4C-5B-6A

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Lesson 15 Third Conditional