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Hi sir,
I have a question on the F3 mock exam paper question 4.
Question as below:At 31 Oct 2013 a business had machine that costs $120,000 and with accumulated depreciation of $25,000. On 1 Jan 2014 they sold a machine for $10,000. This machine had originally cos $30,000 on 1 Apr 2012.
The business had a depreciation policy of straight line depreciation at rate of 20% per annum, on a monthly basis.
What is the depreciation expense for the year ended 31 Oct 2014?I attempt this question and came up with depreciation charge = 30000 x 0.2 x 2/12 + 90000 x 0.2 = 19,000.
However the answer is 19,500.Can you please help?
Hi, Natalie..
I have the same doubt about that question you mentioned.
Could it be that depreciation for the sold machine was charged for three months?
Then again, it says, it was sold on 1st January 2014,.. so that would be two months (Nov & Dec 2013) EXCLUDING Jan 2014. I also don’t see why Jan 2014 should be Included.Lets see what answer we get from the Lecturer. (Hope he answers soon)
When you mention question no 37, which question is it. That depreciation question you mentioned as question 4 was question 18 for me. So, I assume that the order of questions are different every time we attempt this exam.
When I did it, question 37 was section B>>Q1(Consolidated SFP)>>Q2(Calculate Retained Earnings)..
Are you referring to the same question?
Natalie:
Your answer is correct. I do apologise – I will have the answer corrected.
Thank you for letting me know.Nishan:
Yes – the questions are taken by the computer at random from a bank of questions. So every time the test is taken there are likely to be different questions in a different order.
Nishan:
2520 is correct (and it says that the correct answer is 2,520).
The computer marked you wrong because of the ” , “.
I will have that sorted out and I am sorry.
(and don’t worry – the ACCA software does not make that sort of mistake 🙂 )In deed john.. but I believe, for section B, it’s the same two questions always. I tried different times and the same two questions come.
Also what about the separate question I posted? 2520 is the correct answer right?
Great.. Thanks..
Could I also ask,….
If in a question where we need to pick two correct answers, if we pick one right and the other wrong do we get 1 mark for the correct pick or do we loose the 2 marks all together, like in your test?
Hi,
Q37 is the same for everyone but not random.
It is about calculating the retained earning
.
Alice bought 90% of equity share capital of Bertha 2 years ago on 1 july 2012, when the retained earnings of bertha stood at $12,000.
During the year alice had transferred goods to bertha for $45,000 – this figure includes a mark-up of 50%. two thirds of these goods remained in inventory at the year end. the balance on the current account between alice and bertha was $53,000 at the year end.
The fair value of the non controlling interest at the date of acquisition was $10,000.Alice’s investment in Bertha’s at cost:$85,000
Alice’s share capital: 36,000
Alice’s retained earnings: 189,000
Bertha;s share capital: 12,000
Bertha’s retained earnings: 72,000.Sorry Natalie – you are correct in that the Section B questions are the same each time.
First you need to calculate the PURP. The inventory at the year end is 2/3 x 45,000 = 30,000. This includes a mark-up of 50%, so the PURP is 50/150 x 30,000 = 10,000.
When we consolidate, this must be subtracted from Alice’s retained earnings, because it was Alice who sold then to Bertha and therefore it was Alice who had taken the profit.So the retained earnings are:
All of Alice: 189,000 – 10,000 = 179,000
plusAlice’s share of Bertha’s post acquisition earnings:
90% x (72,000 – 12,000) = 54,000
Total: 233,000
(but check my additions 🙂 )Hi,
I realise this thread is very old, hopefully I get a reply.
I also struggled with this question, but the only part i don’t understand is why you do 50/150 – how is this related to mark up? Please could you explain.
thanks very much.
In future you must ask in the Ask the Tutor Forum if you want me to answer – this forum is for students to help each other.
Since there is a mark-up of 50%, then for every $100 cost the profit will be $50 and therefore the selling price will be $150.
Putting it the other way round, for every $150 selling price then profit will be $50.Since the inventory was sold from one company to the other at a selling price of $30,000, then the profit must be 50/150 x $30,000
My free lectures on mark-ups and margins will help you.
At 1 January 20×1,there was an allowance for receivables of $3000.During the year ,$ 1000 of debts were written off as irrecoverable, and $ 800 of debts previously written off were recovered.At 31 December 20X1, it was decided to adjust the allowance for receivables to 5% of receivables which are $20000.
What is the total receivables for the year?
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