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  1. Profile photo of nari says

    Hello Mike, I am confused regarding your working for note 4 preference shares is it that the 41.6 on the TB was an error made by pricewell? and why is the 6% calculated ?..I am accustomed to the effective % being used and the dividends paid are then subtracted . I would greatly appreciated if you can explain it to me from a different angle. (Not understanding this is driving me up a wall!!)

      • Profile photo of Mahoysam says

        Thank you very much Mr Mike for the support and I sure will.

        Mr Mike, I have a question regarding Q2 in the exam – Now as I have been practicing, I notice that Q2 comes in two forms, they either give you a trial balance with notes and ask you to prepare the F.S. or they give you a draft financial statement and ask you to redraft it, now I am very confident about the former but I struggle with the latter – I notice that Q2 in recent exams (2008-2013) are all the TB form but as you go back in years I find Q2 style is the other one. Do I get from that, that the examiner has changed his style and now he provides us with the TB and asks us to prepare the FS? I will try my best to practice the other form as well (i am not the kind of student who takes risk) but I would feel more confident to know if a TB type of question is what I should expect giving that in the past 6 years this is how the examiner put the question. I am sorry for the long inquiry, I hope it was clear. I will really appreciate your opinion on this because I am so struggling with the other form of question, yet I am almost perfect with the TB kind of questions and I don’t have much time to practice very much the other form, I’d rather move on with the rest of the questions as you advised!

        Thanks a lot.

        Maha

      • Profile photo of MikeLittle says

        I think you should be ready for either type. There are two distinct ways of interpreting the examiner’s choice of question style.

        1) you could say that he’s asked a TB question consistently for the last 6 years, so why would he change, or

        2) he hasn’t asked a re-draft type question for 6 years – it’s time that he did!

        Maha, don’t gamble! There’s not really any more to the re-draft questions than there is for the TB type questions.

        Just keep on top of those mini-exercises at the back of the course notes and you’ll eat F7 for breakfast!

        Probably ;-)

      • Profile photo of Mahoysam says

        I didn’t think about it this way, you are right, it could be either possibility but I really hope not !!

        I agree, no gambling! I guess I will watch your lectures on the past exam questions (old ones) and try to master the other form of Q 2 as well, I am not sure what is my problem because I solve the TB questions really well. I will practice more of this and the other quotations as well. ( as much as my time allows me!)

        I have been eating F7 as a breakfast, lunch and dinner lately !! :D I have had enough! lol!

        Thank you for the prompt response, much appreciated! – I apologise in advance because I am going to bother you a lot in the coming days with many questions till the exam comes! :D

        Thanks,

        Maha

    • Profile photo of MikeLittle says

      Hi

      It really depends on whether the asset is to be used ONLY on the contract or whether it has a useful life after the contract has been completed. I would tend to keep the depreciation cost separate from other costs. Depreciation will normally be calculated on a proportion of time basis – so for example, depreciate for 1 and a half years out of the 4 year estimated useful life – whereas costs (general) are valued on a proportion of total expected costs and specific costs are allocated in full to the year to which they relate

      • Profile photo of tejot says

        Sir in the recorded answer you have included the asset to be used in the contract in sofp but the depreciation on it hasn’t been added to the cost of sales. And the asset has been shown net of depreciation.

      • Profile photo of MikeLittle says

        Well! I wonder where I have included the depreciation expense! It is probably within the contract workings in the “Costs recognised” figure. It must be somewhere else the Statement of Financial Position wouldn’t balance!

        I apologise if it isn’t clear

      • Profile photo of tejot says

        Sir there absolutely no need to apologise I got it while our working for contract we have considered depreciation.

        One more thing Sir, exactly two days back I used to fear F7 particularly question 1 and 2 your workings (especially revision lectures) have made me enjoy them.

        Feeling positive now.

        Thanks

      • Profile photo of MikeLittle says

        Tejot – that’s good to hear! Let’s hope you cary this confidence through into the exam room and, if you should have any more queries, do post them on this site!

      • Profile photo of Mahoysam says

        I am sorry, I couldn’t even go through the whole question because I couldn’t get what you were doing starting the tax and so on. Of course I can’t ask you to explain everything, therefore, I decided to start working on the mini questions and then I will come back to the question, do you think practicing the mini questions should help me better solve question 2 of the paper? if you have any other suggestions regarding Q 2, I will really appreciate it.

        Thanks, Maha

      • Profile photo of MikeLittle says

        Ni, no worries about negativity – the exams are moving inexorably closer as each day passes and panic can easily set in.

        Working through the mini exercises is a MUST if you are going to have a good go at question 2. That’s why they are there! There’s not a lot of teaching specifically aimed at question 2 – but the questions 2 in the exams all seem to be pretty similar and, after practising on the mini exercises, you’ll find that you can race through much of the groundwork to arrive at the figures which you can then slot into an answer.

        No practice? BIG time pressure in the exam. Practice? Time pressure is radically reduced.

      • Profile photo of Mahoysam says

        Thank you Mr little for this support – I have been practicing and I think I am getting better! I am also attempting F8 and F9 this December sitting :( But I think F7 is the toughest, that’s why I will assign more time to it!

        Hoping to pass all exams! I think I have got a good chance, I just need to utilize this last month and practice lots and lots of questions!

        Thank you for your help through this! I will try my best and I will practice more.

        Maha

  2. avatar says

    Thanks Mike. I was just looking at the marking scheme and it seems the affected areas are cos and the sofp to which 3 marks is allocated out of the 25 marks. Maybe the best approached is to finish with the exceptionally tricky note if you still have time

    • Profile photo of MikeLittle says

      @fzinyemba, If you listen to my worked answers to all the qs 1 and 2 since 2007, you’ll realize that I tend to leave these tricky points until the last – ie I deal with all the other points first before tackling these difficult ones

    • Profile photo of MikeLittle says

      @fzinyemba, How do you work out that it’s worth two marks? There is always 1 note in an F7 question 2 which is exceptionally tricky – but where have you got the idea that it’s only worth a couple of marks? And ask yourself this- how can you begin to think about answering a question like this WITHOUT attempting the “note 2″ s in a question?

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