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@insta55 said:
Overview;
Q1 – a) real options b) i)Npv – few little tricky bits with tax and inflation in variables ii) Bsop or VAR to value phase 2?I used BSOP – option to expand. Was there enough info on VAR?
also since the a was about real options, assumed they wanted to know about real options.1a was about loss relief. loss relief for sole traders in their first year of trading. They gave us his salaried income for 4 years and we had to use the losses in the first two years of his self employment in the most efficient way. The question wanted us to compare traditional carry back to carry back 4 four years FIFO basis.
2b – was this the one investment property one? can’t remember now!
Also since she had 6 full time employees I assumed employment allowance was used up and therefore not availabe for the part time employee.
@hutchy1978 said:
Wasn’t D Designs a ltd co??Hence the dividend??
As far as i remember she was a sole trader.
Thats why the question said what was the cost to cate for D Designs employing a part time employee.For 9 marks it would have been very easy then!
@hershey said:
Yeah it was kind of easy, anything relating to employee is deductible expense from the Income tax, and that NIC on benefit i think was less than 2000, hence i wrote that she did not have to pay.For the annual tax cost i just calculated the IT liability, didn’t know what he actually meant by ‘tax cost’ 😛
It was the net cost to cate of hiring the employee.
She was earning (£90,000 + Dividends) £120,000 and therefore her PA was abated. Once she hires someone her profits fall and thus she gets her PA so effectively she’ll pay less tax and this is a tax saving.So i put thar the net cost should be cost of hiring the employee less tax saving to the business less the tax saving for Cate as the Q specifically asked the net cost for Cate for D desgin hiring the temp staff.
Q1 and 2 i thought were doable. Q4 and 5 were my options. There was a tech article on ACCA for trusts which helped.
Out of curiosity, in repspect of Q1 did you all use the ties test to determine J was not a UK resident?
Also, in Q4 the number of shares we had to calculate in order to get to an after tax liab of £30,000. I got 2000 what did you guys get?
@chanpiseth said:
Why NEGATIVE GOODWILL??? Why ??? T_Ti got that too! it was a bargain purchase i think. Thats why it was negative.
q1 the adjustment for JCP threw me a little.
i did q2 and q4. Not sure i got it all for impairment though.
@avnisapan said:
What was the answer to the first MCQ? 3.71 or 3.50?
I also found that even by process of elimination I ended up with 2 options…What was the treatment for interest of 150k in NPV question?
I am not happy with this exam 🙁 🙁 🙁I got it as 3.50.
I left the interest of £150k – apparently i was wrong to do so?
How did you calculate the od from 2014 to 2015?
I thought that aswell. Since they put so much emphasis on the November being zero and it being a money maker for the company.
What did you guys do for the machine disposal? The capital allowance threw me on that one, did we have to work backward and calculate the original cost of the machinery? The question only mentioned that the initial cost of investment 5m was allowable for cap allowances. So I just put the disposal amount in.
I got a positive NPv of like 2m….
Yeah as @vishali says it done now!
Should really move on to my next paper…
Cash and cash equips on cash flow statement
Net cash outflow for the year (500)
Cash and cash equivs at start of year 300
Cash and cash equivs at end of year (200)@frank that’s exactly what I said for q5.
But for q4ii because they were asking for YE Sept 13, and the sale of the property occurs on 1 oct 13 with a profit on disposal of $1.5m does this not mean an adjusting event and events after reporting period? Restate so next year no profit occurs and then deal with the sale next year. Not a sale and re purchase as they are making a profit and also that it is available on the open market if they reject to buy it after 5 years.
i think PUP was 600
quite clever what they did for that. Did people add up the sales and deduct from revenue in CIS?From what my f7 lecturer was saying, you sit the individual questions and they mark it and provide feedback.
Once you write q1 and they mark it whilst you are doing q2 etc.
All under timed conditions.
I think I might attend on Sunday for f7.
What paper are you going for?
As the investment is linked to the market index price , the investment will increase/decrease proportionally to the market index.
In the above case (as you have put the question) the answer would be as follows:
Change (1296 – 1200) = 96
————————————-—————— = 0.08
Original (1200) = 12000.08 x 12,700 = 1,016 And that’s your increase.
Or to calculate in one easy step the total value,
1296
—— = 1.08
1200And to get your total value at the end it’s 1.08 x 12,700 = 13,716
I believe I am correct however I shall let one of the tutors correct me!!