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  4. Thank you Mike but please be a little more audible. Am using Revision kit for Dec 15 sitting and it seems some of the questions are so edited ,cos some parts are not there like the share section. Plse advise me on what to do.

    • Hi Suzana

      I believe that I write the name of the question and the exam session at the start of those answers that are included within the revision lectures. With that information you should be able to download the actual question from the past exams that you can find on this website (or from the ACCA’s own website)

      And next time that I do any recording, I’ll try to be a bit more audible!

    • Without looking at the question, this sounds like an example of sale and repurchase. It’s not really a sale – the company has the right (probably the obligation!) to buy the goods back at the end of a specified period of time.

      And if it’s not a genuine sale, then it should be removed from revenue and treated as a loan

      Ok?

  7. How did we get the figure 80 million shares, instead it should be 100000 shares ?(50000 x 0.50) ?

    Weighted average number of shares:
    1 April 2012 to 30 June 2012 80 million x $2·00/$1·84 x 3/12 = 21·7 million

      • opps sorry
        ur ryt 40000 was the price and 80,000 is the shares

        apart from that every thing explained is fine

        just follow the steps u will get the answer straight n forward….

    • if u see my first comment which i made it u will understand

      we have to calculate 40,000 shares which were at the start of the year( take it as 100 %)

      in the question we were given the
      opening share plus 25% shares right during the year which value was given in the question 50,000 shares

      now to go back to the opening shares

      we have to work back

      100/ 125 * 50,000 shares

      you will get 40000 shares

      so during the year the right was of 10,000 shares

      now sum it all up

      40,000 shares ( 100% ) start of the year

      10,000 shares (25%) during the year

      50,000 shares (125%) year end( which was given in the the question)

      just work back u will get the shares

      and the price of the price per share is 50cent

      ok nikki

      • Yes I got it now. Thanks a lot gazzi. So for all such questions, whenever a rights issue is issued by the company , we should assume that these shares have also been added up in the Trial Balance?

      • Where ever you need to calculate eps calculation you need to this calculation… and offcourse dear the trial balance given will definatly gives you the year end figure( but which may require some adjusments) i will read the whole question again and let you for sure.

        Key thing for passing this paper is understanding the logic and most important practice more n more….

  8. there were 100% shares before rights issue

    then 25% ( 1/4) more shares added

    which makes 125% equals 50,000

    if u wana go to 100% percent

    100/125 or(1/5) * 50,000

    will give 40,000 shares

    i hope this makes sense

  11. Hi Mr Mike as per q share cap were $ 50,000 @ 50 cents note (v ) recorded a fully subscribed rights issue of 1 for 4 at $ 1.20 each how did you get the 40.000/=.
    I’m lost there.
    please help me out.

    • When calculating EPS 80,000 is the number of shares whereas when doing Statement of Changes in Equity the figure is 40,000 which is 80,000 shares at 50c each = $40,000. Then there’ s a rights issue of 1 for 4 which brings the shares from $40,000 / 80,000 shares to $50,000 / 100,000 shares.
      I trust this makes sense

      • Iam sorry but it didnt make any sense to me at all. i just cant get it. can somebody explains to me the adjustment that has been been made to the fully recorded right issue when it effected the change in equity statement.

      • If you start with 40 and have a 1 for 4, how many do you finish up with?

        Same question but backwards …. if you have 50 but that’s after a 1 for 4, how any did you start with?

  13. First of all Thank you Mike for Your solution. I got all the adjustments right 🙂

    I have question regarding “Revaluation of Asset held for sale”. In exam I also revalued plant held for sale (after charging 6 month depreciation) and transferred surplus to Revaluation A/C.

    But when I came out of examination hall I suddenly remembered that according to IFRS 5 standard, Immediately before the initial classification of the asset as held for sale, the carrying amount of the asset will be measured in accordance with applicable IFRSs and after classification, asset is measure at lower of its carrying value and FV less costs of disposal”. But in exam question Atlas is not following revaluating model for its Plant.

    I am still confused. Am I missing something? Please! Guide me.

    Thank you
    Haris.

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