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If I was giving out a tip it would be to not do question practice too early – which might seem odd given that’s generally the opposite advice for other papers
With P6 there is just too much to learn to get bogged down in questions too early on. Doing two questions could take up a whole revision session and you have then only covered 3-4 areas perhaps (and relied on the book the whole time)
In P6 there are possibly 40-50 areas to get to grips with and you just won’t get through them.
Other than that it’s about putting in the time and recognizing you can’t expect to know it all and therefore being realistic about it and covering the key areas and not trying to learn every little thing
Good luck x
89%!
Very happy -didn’t know what to expect as I hadn’t sat any mock exams so actually went in to the exam nervous not knowing if I would even pass!
There are no prizewinners in March/Sep I don’t think – which I’m glad of seeing Olef’s score as I would have been gutted as some sittings 89% would be enough!
No offense Olef and well done! Give yourself a pat on the back and get it added to your CV 😉
Yes that’s right. You had to critically evaluate each option in turn but then support the consultants findings which means that you need to find a way of justifying that overall which wasn’t too hard given then scenario
They are probably all acceptable answers provided you don’t just put the generic advantages and disadvantages
The key is to relate it to the company and explain why that would provide a particular advantage that is particularly relevant to them.
So if you said strategic alliance because it’s low cost -say this is relevant die to poor financial results so unlikely to have significant reserves to fund a major expansion
As long as you do that it doesn’t matter too much.You also need to remember to do the good and bad of each and then conclude.
None of the strategies were perfectI argued a merger would lead to cannibalizing our own sales and has strong cultural issues particularly as a different country
I went for acquisition for the following reasons;
>they had experience of acquisitions
>they had no exp overseas and this would effectively be buying it in
>the shareholders demanded significant growth on dividends and share price fast -this is the fastest growth model
> strategic alliance risks losing core competences
>all the directors were approaching retirement and they had no succession planning -acquisition acquires additional directors and increases pool of talent to select new ones from
> potential synergies>organic growth would have taken too long the directors wouldn’t be there to oversee which ruled that out for me
>can’t remember the fourth option
Essentially in making your choice I think you are supposed to be thinking about which option allows it to best overcome it’s weaknesses / threats and use it’s strengths
I did Q3 and Q4. Took one look at all the questions and these definitely seemed like the ones I would get the most minutes per Mark on.
Started with Q3, drew up the decision free and only option 3 was profitable after deducting fixed costs which is necesaary as contribution only takes into account variable profits.
Obvious problems to mention were:
>Option 3 had the most estimation due to increased contribution
> they had taken the economic forecast from an financial advisors website- why not government which is much more reliable than a bias advisor
> doesn’t take account of time value of money- project 3 had big initial costs and it’s a 5 year project
> decision trees represent a lot run average and bit suitable for one off projects + the outcome isn’t a result that could actually happenOn to part b) which was about finance and the risks of each
> reatined earnings -unlikely to have as been making losses
> may be able to obtain from the group as it’s a global hotel chain
> low risk and cost as the money is there
> mention for option 2 wouldn’t be a huge cost so more likely to have enough reserves + outflow would be over timeEquity- may struggle with share issues due to poor results
Dividends required to be paid to satisfy shareholders but this is more flexible than debt financeDebt finance- easiest to obtain
> likely to have lots if assets to secure against making it cheaper as less risk to lender
>requires fixed cash repayments increasing risk and gearing as these need to be metAnyone else put anything similar?
Nah I’m fairly sure you’re right. Contribution is revenue less variable costs hence why when you calculate break even it’s FC÷ Contribution.
You need to deduct fixed costs don’t worry.
Passed – 90% – Bring on P2!
Good luck to anyone still waiting on their results to come through.
No it was an odd amount. I think the budgetting one was to say they had thrown in a not for profit.
Was there a cash flow question in there at all? I don’t remember
Revaluation in consol = All of the parent, % of the Sub after acquisiton I think – bit vague now on the quesiton
The DT question the credits were the prepayments and the interest receivable the other two options – loan didnt effect tax and interest paid would be a DR to the DT I think as its tax relief you haven’t got yet rather than tax you haven’t paid yet
Can’t remember the question for the consol sorry
Budgeting I went with the % of garbage that was recycled rather than sent to landfill or w.e it was.
Revenue contract one the output methods are the ones based on certification or progress of the job. Anything to do with costs or labour is an input
Errors don’t carry forward, however I think the markers are a bit lazy about it tbh, they are on a piece rate payment basis after all.
However from talking with tutors who have marked the feeling I get is if you are a border line fail they will put more effort in to making sure that they have awarded you any marks you should have got.
Bit crap if your way over the pass mark but handy if your on the threshold.
It was D I think. That is if its question 4 you’re talking about
You had to add the cost of the investment, share of the profits and then deduct the parents share of dividends paid
For the EPS question you needed to use the TERP to get a bonus fraction, I think it was A) the answer.
The impairment question – Lower of CA and Recoverable amount – Recoverable amount if the higher of value in use and NRV
Anyone struggle on the Transfer from RE question? I deducted another 15 from the revaluation reserve
705-15 =690 and then added on the revaluation (after accounting for depreciation for the year I think)
I’m still not seeing your argument for not deducting it, the purchases are going to cost 10% more to you post acquisition so you need to add that 4k on somewhere. If not COS then presumably you added it into overheads instead?
If you didn’t take it off anywhere then your OP Margin and ROCE margin are going to be a more than double what I got and your answers are going to be a lot different to mine.
Either way I still think your idea on this is incorrect. If it was a discount whereby only after spending x amount was the discount applied then that might have some merit but even then that’s still going to reduce direct costs even if its isn’t deemed to directly reduce the products themselves. I think you may have just over thought it
The COS discounts needs to be accounted for as 72000 /90*10 because 90% of the cost is included, your effectively grossing it up
I’m not sure that rule would impact the question there as we aren’t measuring inventory. The cost of the products will be 10% higher so COS will go up.
If they gave us an inventory figure to deduct from purchases that might be relevant though
I adjusted the subs figures for 9 months,
Added back the sales and costs of goods of inter co – 10,800
Deducted the purp (sub) – 300 (1800*20/120)
Deducted the fair value movement on inventory – 200
Deducted the fair value depreciation on PPE – 1500 (4000/2 *9/12)Then cancel all of the parents investment income.
300 was dividends from a sub
200 was dividends from associate (or vice versa)That left investment income as 300 (all relates to subs)
You then had to take 25%(?) of the associates profit = 2400*0.25 =600 (I think)
This goes as a separate line I think as profit from associatethe finance charge then needed adding in on the parents column.
I think that was it. My bottom line profit was around 5800 for the NCI I think (before apportioning) and maybe 19,660 (something like that for the parent although that may be before tax it was a while ago!)
Fairly confident with it all as long as I haven’t mucked up any calcs,
Well that’s reassuring! Unless we’re both wrong that is!
I can just about remember Q31 so will try list that later if anyone wants to compare notes. Got a badminton game to get to now though.
Andy
On the first MCQ I went D but wasn’t sure either way, I had arguments for against – For example D is actually a disadvantage of principles based because the leasing standard contradicts the one that sets of the basis for recognition.
Arguably though if an accountant follows the rules that could be a defence in court. – But then it does restrict what they can do as there is no “comply or explain” allowance
For the deferred con its how many shares you acquired so you don’t multiply by 3/5
Q32
Revenue = 89300 (94000×95%)
COS =
Per P &L – 73000
Less licence 1000
Add discount 4000Total = 76,000
Interest was adjusted to 800
NCL would be £10,000 loan
Equity =
3000 Reval Reserve
3300 retained earnings -(given in the question)
+whatever share capital wasPBIT (needed for operational profit margin and ROCE) I got 3300.
ROCE was 13%
Asset Turnover 2.8
GPM 15.9%
OPM 3.9%
Sales per square metre = 7442Anyone get those?
Thanks, that sounds right, I’m fairly sure i’ve got that right, I think RE must be different to what I said then, thanks for the response.
1st question was a bit of a 50/50 for me what did everyone go for?
It was the one about advantages of a rules bases system
A
B) Firefighting
C) Accountant may be protected from law suit or something
D) cant be contradicting standardsC or D?
I can’t remember the final figure for goodwill,
It was something like;
Shares = 15000 x 60% x 3/5 x $7 =37800
Def Consideration =15000 x 60% x (Insert figure!?) ANYONE REMEMBER WHAT THIS WAS?
NCI FV = 15000 x 40% x $2 = 12000Less Net assets = 43800
SC = 15000
RE = 23000 + 1600 = 24600
FV PPE = 4000
FV Inventory = 200