OpenTuition.com Free Accountancy Education » All Posts http://opentuition.com/forum/ask-the-tutor-acca-f7-exams/feed Tue, 21 May 2013 08:48:59 +0000 http://bbpress.org/?v=2.3.2 en-US http://opentuition.com/topic/pup/#post-126401 <![CDATA[Reply To: PuP]]> http://opentuition.com/topic/pup/#post-126401 Tue, 21 May 2013 05:07:38 +0000 tripo3m Mike, how do we also treat pups arising from the sub trading with associates? or the converse?

]]> http://opentuition.com/topic/finance-leases-2/#post-126397 <![CDATA[Reply To: Finance Leases]]> http://opentuition.com/topic/finance-leases-2/#post-126397 Tue, 21 May 2013 05:04:00 +0000 tripo3m Mike, kindly shade more light on the number of years and again are we not supposed to do one additional year for us to come up with the Long tern liability and Short term liability? your guidance is always appreciated.

]]> http://opentuition.com/topic/hi-sir-consolidation-ques/#post-126390 <![CDATA[Reply To: hi sir, consolidation ques]]> http://opentuition.com/topic/hi-sir-consolidation-ques/#post-126390 Tue, 21 May 2013 02:55:10 +0000 mr n hi sir, hope you havent forgotten my ques:(

]]> http://opentuition.com/topic/pup/#post-126374 <![CDATA[Reply To: PuP]]> http://opentuition.com/topic/pup/#post-126374 Mon, 20 May 2013 21:46:09 +0000 hasanali95 But aside frm that qs,if there is a pup on tnca sale do we adjust it in the cos as we do with pup on inventory?

]]> http://opentuition.com/topic/finance-leases-2/#post-126373 <![CDATA[Reply To: Finance Leases]]> http://opentuition.com/topic/finance-leases-2/#post-126373 Mon, 20 May 2013 21:24:26 +0000 captmario Ok i understand but Why 5 years? is it 4 years and 1 day thats why we count it as 5 years?

]]> http://opentuition.com/topic/finance-lease-2/#post-126369 <![CDATA[Reply To: Finance lease]]> http://opentuition.com/topic/finance-lease-2/#post-126369 Mon, 20 May 2013 20:52:11 +0000 MikeLittle On the assumption that the finance lease interest is based on the brought forward capital amount outstanding at the start of the year, the treatment is acceptable. Yes, ok, we could compute interest on interest but that’s not even in the P2 syllabus. Don’t make complications where the exam is complicated enough already!
:-)

]]> http://opentuition.com/topic/pup/#post-126368 <![CDATA[Reply To: PuP]]> http://opentuition.com/topic/pup/#post-126368 Mon, 20 May 2013 20:49:27 +0000 MikeLittle The example I can remember said that the parent old the asset out of stock ….ie it was included within the parent’s operating profit and the pup was therefore deducted from operating profits ( ie added on to cost of sales in the parent )

]]> http://opentuition.com/topic/finance-leases-2/#post-126367 <![CDATA[Reply To: Finance Leases]]> http://opentuition.com/topic/finance-leases-2/#post-126367 Mon, 20 May 2013 20:47:40 +0000 MikeLittle In your example ( which college buys their lecturers Aston Martins? ) I would say the life of the lease was 5 years.

Depreciation would therefore be $10,425 / 5

The CL / LT split would be the capital balance outstanding at the end of the first year so that would be $10,425 – $2,500 = $7,925

There would in addition be a current liability of 10% x $10,425 representing interest accrued during the first year which is not due for payment until “tomorrow”

OK?

]]> http://opentuition.com/topic/impairment-2/#post-126366 <![CDATA[Reply To: Impairment]]> http://opentuition.com/topic/impairment-2/#post-126366 Mon, 20 May 2013 20:43:01 +0000 MikeLittle Do what the examiner points you towards. If there is no instruction like “Goodwill impairment is to be included in cost of sales” or ” ……..administrative expenses” then I would be inclined to show it as a separate line item after Administrative Expenses

]]> http://opentuition.com/topic/goodwill-4/#post-126365 <![CDATA[Reply To: Goodwill]]> http://opentuition.com/topic/goodwill-4/#post-126365 Mon, 20 May 2013 20:40:51 +0000 MikeLittle In proportionate basis, there is no goodwill attributable to the nci so the goodwill computed in working 2 is the goodwill on the CSofFP assuming no impairment

]]> http://opentuition.com/topic/finance-leases-2/#post-126353 <![CDATA[Reply To: Finance Leases]]> http://opentuition.com/topic/finance-leases-2/#post-126353 Mon, 20 May 2013 17:17:38 +0000 captmario Also for example if question asks ‘Show how company will account for lease in first year’.

Do we take split up into CL and LTL of Lease Liability balance at year end or at year start?

i have this small example that has me confused..

To reward a long-serving senior lecturer a college seeks to buy a specialist sports car, an Aston Martin, as a company car, taxed as a benefit-in-kind. Two advertisements appear in the local newspaper for second-hand Astons at $11,000. The lecturer visits the showroom nearest the company and after an AA inspection negotiates the price down to $10,425, on the understanding that the company (college) will pay $2,500 immediately on 1 January 2008, with 4 more instalments on the anniversary of signing the agreement. The implicit rate of interest is 10% per annum .

so is depreciaton 10425/5 or 10425/4 ?
and After payment of 2500 at year end, Liability came down to 6218, so do i take split up of that into CL and LTL or should i take split up of 7925 into CT and LTL? When showing extracts into First year Financial statements?

]]> http://opentuition.com/topic/finance-leases-2/#post-126351 <![CDATA[Finance Leases]]> http://opentuition.com/topic/finance-leases-2/#post-126351 Mon, 20 May 2013 17:02:18 +0000 captmario Hello mike,
Assuming we are doing finance lease and payments are made in advance.
There is one advance payment immediately and 4 followup payments on year ends, what would be life of the lease?
4 years or 5 years? (For calculation of depreciation)

]]> http://opentuition.com/topic/impairment-2/#post-126344 <![CDATA[Impairment]]> http://opentuition.com/topic/impairment-2/#post-126344 Mon, 20 May 2013 16:16:42 +0000 hasanali95 In the COnsolidated income statement ,do we take impairment as admin expense or are we also allowed to take it in cos?

]]> http://opentuition.com/topic/goodwill-4/#post-126343 <![CDATA[Goodwill]]> http://opentuition.com/topic/goodwill-4/#post-126343 Mon, 20 May 2013 16:15:23 +0000 hasanali95 If proportionate goodwill is used do we use that figure as goodwill in the CSFP or do we take the full goodwill?

]]> http://opentuition.com/topic/pup/#post-126335 <![CDATA[Reply To: PuP]]> http://opentuition.com/topic/pup/#post-126335 Mon, 20 May 2013 15:29:41 +0000 hasanali95 I mean when it sells for eg a plant to subsidiary and there is an intra group pup do we adjust in COS?

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