2010年12月份ACCA考試真T(F7)

2010年12月份ACCA(國際注冊會計師)考試真題(F7)

ALLFIVEquestionsarecompulsoryandMUSTbeattempted

1On1June2010,Premieracquired80%oftheequitysharecapitalofSanford.The

considerationconsistedoftwoelements:ashareexchangeofthreesharesinPremierforeveryfiveacquiredsharesinSanfordandtheissueofa$1006%loannoteforevery500sharesacquiredinSanford.TheshareissuehasnotyetbeenrecordedbyPremier,buttheissueoftheloannoteshasbeenrecorded.AtthedateofacquisitionsharesinPremier

hadamarketvalueof$5eachandthesharesofSanfordhadastockmarketpriceof$3·50each.Belowarethesummarizeddraftfinancialstatementsofbothcompanies.

Statementsofcomprehensiveincomefortheyearended30September2010

Statementsoffinancialpositionasat30September2010

Thefollowinginformationisrelevant:

(i)Atthedateofacquisition,thefairvaluesofSanford‘sassetswereequaltotheircarryingamountswiththeexceptionofitsproperty.Thishadafairvalueof$1·2millionbelowitscarryingamount.Thiswouldleadtoareductionofthedepreciationcharge(incostofsales)of$50,000inthepost-acquisitionperiod.Sanfordhasnotincorporatedthisvaluechangeintoitsentityfinancialstatements.

Premier‘sgrouppolicyistorevalueallpropertiestocurrentvalueateachyearend.On

30September2010,thevalueofSanford’spropertywasunchangedfromitsvalueatacquisition,butthelandelementofPremier‘spropertyhadincreasedinvalueby$500,000asshowninothercomprehensiveincome.

(ii)SalesfromSanfordtoPremierthroughouttheyearended30September2010hadconsistentlybeen$1millionpermonth.Sanfordmadeamark-uponcostof25%onthes

esales.Premierhad$2million.(atcosttoPremier)ofinventorythathadbeensuppliedinthepost-acquisitionperiodbySanfordasat30September2010.

(iii)PremierhadatradepayablebalanceowingtoSanfordof$350，000asat30September2010.ThisagreedwiththecorrespondingreceivableinSanford‘sbooks.

(iv)Premier‘sinvestmentsincludesomeavailable-for-saleinvestmentsthathaveincreasedinvalueby$300,000duringtheyear.Theotherequityreserverelatestotheseinvest

mentsandisbasedontheirvalueasat30September2009.Therewerenoacquisitionsordisposalsofanyoftheseinvestmentsduringtheyearended30September2010.

(v)Premier‘spolicyistovaluethenon-controllinginterestatfairvalueatthedateof

acquisition.ForthispurposeSanford’ssharepriceatthatdatecanbedeemedtoberepresentativeofthefairvalueofthesharesheldbythenon-controllinginterest.

(vi)Therehasbeennoimpairmentofconsolidatedgoodwill

Required：

(a)PreparetheconsolidatedstatementofcomprehensiveincomeforPremierfortheyearended30September2010.

(b)PreparetheconsolidatedstatementoffinancialpositionforPremierasat30September2010.Thefollowingmarkallocationisprovidedasguidanceforthisquestion：

(a)9marks

(b)16marks

(25marks)

2ThefollowingtrialbalancerelatestoCavernasat30September2010:

Thefollowingnotesarerelevant:

(i)Cavernhasaccountedforafullysubscribedrightsissueofequitysharesmadeon

1April2010ofonenewshareforeveryfourinissueat42centseach.Thecompanypa

idordinarydividendsof3centspershareon30November2009and5centspershareo

n31May2010.Thedividendpaymentsareincludedinadministrativeexpensesinthetrial

balance.

(ii)The8%loannotewasissuedon1October2008atitsnominal(face)valueof$30million.Theloannotewillberedeemedon30September2012atapremiumwhichgivestheloannoteaneffectivefinancecostof10%perannum.

(iii)Non-currentassets:

Cavernrevaluesitslandandbuildingattheendofeachaccountingyear.At30September2010therelevantvaluetobeincorporatedintothefinancialstatementsis$41·8million.

Thebuilding‘sremaininglifeatthebeginningofthecurrentyear(1October2009)was18years.Caverndoesnotmakeanannualtransferfromtherevaluationreservetoretainedearningsinrespectoftherealizationoftherevaluationsurplus.Ignoredeferredtaxontherevaluationsurplus.

Plantandequipmentincludesanitemofplantboughtfor$10millionon1October

2009thatwillhavea10-yearlife(usingstraight-linedepreciationwithnoresidualvalue).Productionusingthisplantinvolvestoxicchemicalswhichwillcausedecontaminationcosts tobeincurredattheendofitslife.Thepresentvalueofthesecostsusingadiscountrateof10%at1October2009was$4million.Cavernhasnotprovidedanyamountfort

hisfuturedecontaminationcost.Allotherplantandequipmentisdepreciatedat12·5%perannumusingthereducingbalancemethod.

Nodepreciationhasyetbeenchargedonanynon-currentassetfortheyearended30September2010.Alldepreciationischargedtocostofsales.

(iv)Theavailable-for-saleinvestmentsheldat30September2010hadafairvalueof$13·5million.Therewerenoacquisitionsordisposalsoftheseinvestmentsduringtheyearended30September2010.

(v)Aprovisionforincometaxfortheyearended30September2010of$5·6million isrequired.Thebalanceoncurrenttaxrepresentstheunder/overprovisionofthetaxliabilityfortheyearended30September2009.At30September2010thetaxbaseofCaver

n‘snetassetswas$15millionlessthantheircarryingamounts.Themovementondeferredtaxshouldbetakentotheincomestatement.TheincometaxrateofCavernis25%.

Required:

(a)PreparethestatementofcomprehensiveincomeforCavernfortheyearended30September2010.

(b)PreparethestatementofchangesinequityforCavernfortheyearended30September2010.

(c)PreparethestatementoffinancialpositionofCavernasat30September2010.

Notestothefinancialstatementsarenotrequired.

Thefollowingmarkallocationisprovidedasguidanceforthisquestion：

(a)11marks

(b)5marks

(c)9marks

(25marks)

3Hardyisapubliclistedmanufacturingcompany.Itssummarizedfinancialstatementsfortheyearended30September2010(and2009comparatives)are:

Incomestatementsfortheyearended30September:

Statementsoffinancialpositionasat30September:

Required:

ThefollowinginformationhasbeenobtainedfromtheChairman'sStatementandthenotestothefinancialstatements:

'Marketconditionsduringtheyearended30September2010provedverychallengingd

uelargelytodifficultiesintheglobaleconomyasaresultofasharprecessionwhichhas

ledtosteepfallsinsharepricesandpropertyvalues.Hardyhasnotbeenimmunefrom

theseeffectsandourpropertieshavesufferedimpairmentlossesof$6millionintheyear.'

Theexcessoftheselossesoverprevioussurpluseshasledtoachargetocostofsalesof$1·5millioninadditiontothenormaldepreciationcharge.

'Ourportfolioofinvestmentsatfairvaluethroughprofitorlosshasbeen'markedtomarket'(fairvalued)resultinginalossof$1·6million(includedinadministrativeexpenses).'

Therewerenoadditionstoordisposalsofnon-currentassetsduringtheyear.

'Inresponsetothedownturnthecompanyhasunfortunatelyhadtomakeanumberofemployeesredundantincurringseverancecostsof$1·3million(includedincostofsales)andundertakencostsavingsinadvertisingandotheradministrativeexpenses.'

'Thedifficultyinthecreditmarketshasmeantthatthefinancecostofourvariableratebankloanhasincreasedfrom4·5%to8%.Inordertohelpcashflows,thecompanymadearightsissueduringtheyearandreducedthedividendpershareby50%.'

'Despitetheaboveeventsandassociatedcosts,theBoardbelievesthecompany'sunderlyingperformancehasbeenquiteresilientinthesedifficulttimes.'

AnalyzeanddiscussthefinancialperformanceandpositionofHardyasportrayedbytheabovefinancialstatementsandtheadditionalinformationprovided.

Youranalysisshouldbesupportedbyprofitability,liquidityandgearingandotherappropriateratios(upto10marksavailable).

(25marks)

4(a)IAS8AccountingPolicies,ChangesinAccountingEstimatesandErrorscontainsguidanceontheuseofaccountingpoliciesandaccountingestimates.

Required:

Explainthebasisonwhichthemanagementofanentitymustselectitsaccountingpoliciesanddistinguish,withanexample,betweenchangesinaccountingpoliciesandchangesinaccountingestimates.(5marks)

(b)ThedirectorsofTunshillaredisappointedbythedraftprofitfortheyearended30

September2010.Thecompany'sassistantaccountanthassuggestedtwoareaswhereshebelievesthereportedprofitmaybeimproved:

(i)Amajoritemofplantthatcost$20milliontopurchaseandinstallon1October2007isbeingdepreciatedonastraight-linebasisoverafive-yearperiod(assumingnoresidualvalue).Theplantiswearingwellandatthebeginningofthecurrentyear(1October2009)theproductionmanagerbelievedthattheplantwaslikelytolasteightyearsintotal(i.e.fromthedateofitspurchase).Theassistantaccountanthascalculatedthat,basedonaneight-yearlife(andnoresidualvalue)theaccumulateddepreciationoftheplantat30September2010wouldbe$7·5million($20million/8yearsx3).Inthefinancialstatementsfor

theyearended30September2009,theaccumulateddepreciationwas$8million($20million/5yearsx2).Therefore,byadoptinganeight-yearlife,Tunshillcanavoidadepreciationchargeinthecurrentyearandinsteadcredit$0·5million($8million–$7·5million)totheincomestatementinthecurrentyeartoimprovethereportedprofit.(5marks)

(ii)MostofTunshill'scompetitorsvaluetheirinventoryusingtheaveragecost(AVCO)

basis,whereasTunshillusesthefirstinfirstout(FIFO)basis.ThevalueofTunshill'sinventoryat30September2010(ontheFIFObasis)is$20million;howeverontheAVCObasisitwouldbevaluedat$18million.Byadoptingthesamemethod(AVCO)asitscompetitors,theassistantaccountantsaysthecompanywouldimproveitsprofitfortheyear

ended30September2010by$2million.Tunshill‘sinventoryat30September2009was

reportedas$15million,howeverontheAVCObasisitwouldhavebeenreportedas$13·4million.(5marks)

Required:

Commentontheacceptabilityoftheassistantaccountant‘ssuggestionsandquantifyhowtheywouldaffectthefinancialstatementsiftheywereimplementedunderIFRS.Ignoretaxation.

Note:themarkallocationisshownagainsteachofthetwoitemsabove.

(15marks)

5Mancohasbeenexperiencingsubstantiallossesatitsfurnituremakingoperationwhichistreatedasaseparateoperatingsegment.Thecompany‘syearendis30September.Atameetingon1July2010thedirectorsdecidedtoclosedownthefurnituremakingoperat