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ya, this is what I am assuming.
I am thinking whether is tht possibly there is any ways can raise finance not against ALL of this 3 conditions at the end?Sorry sir, the marks are just an assumption.
I have watched ur lectures video and study the lectures notes.However,
I am just wondering about whether the objectives of BUDGETING PROCESS is it the same with objectives of BUDGETING?For example, the objectives of BUDGETING PROCESS are to compel planning, communicate the ideas and plans to the employees, coordinate the activities??
OR
It will be like to estimate the budgeted production volume, estimate the sales volume, estimate how much materials are needed to use and purchase?
Thanks you a lot
may I know how do we explain these ratio in exam for example, like as u mentioned wages/number of employees, sales/wages?
Thanks sir I gt it. But I still have some doubts regarding to the whistle-blowers are required to report to who? is it the audit committee or the board of directors?
The whistle-blowing policy’s content usually will be set by who?Is that means independence of mind indicates that even though u are having financial interest in the audit client, it does not influence your judgement in forming an opinion. However, independence of appearance indicates that it SEEMS like you are independent from the client. For example, you do not own any share in the client so others think that u are independent from the client, but at the back you may not be as independence as to what others thought.
Am I understand it correctly?How about if the management refuse to sign the letter of representation? what the auditors can do?
may I know the debtor and stock confirmation will be written on client paper or auditor paper? is it the auditor send the confirmation on behalf of the client?For example, if the question is asking for why supply of non audit services will be seen as problem? why it is recommend the auditor should not provide such services?
so in this case, I can use self-interest threat, familiarity threat, independence, sel-review threat, objectivity?
am I right?Mike I am having the same issue with neshnesh from the same questions under acca answer y the impairment of goodwill is reduce from subsidiary post profit ? in normally we will reduce from parent ltd
The adjustment to the provision for contingent consideration due to events occurring after the acquisition is reported in
income (goodwill is not recalculated).
Post-acquisition adjusted losses of Sander are:
Profi t as reported 1,000
Add back write off software (treated as a pre-acquisition fair value adjustment) 500
Additional depreciation on factory (100)
Goodwill written off (w (i)) (3,800)
––––––– (2,400)I was not understand is because in usually we find the dividend paid is using
opening balance+ dividend for the year- dividend paid =closing balance
in order to find the dividend paid that why I don’t understand y straight away use the opening balance to put at dividend paid?
and when I do so the answer that I find for the overall final answer and compare to what I get by using closing cash balance – opening cash balance is differentHi Mike I gt some question which is in the same question paper as above which regards to dividend
2002 2003
current liabilities
proposed dividend 30 40addtional information
the proposed dividends on the company’s ordinary share capital. No Interim dividend were paid.Will it anything enter into cash flow statement?
thanks I got it but may I know why the amortization is debit on the government grant account?
amortization not should be an expense?ok I got it thanks
I have the another question which is acca december 2012 f7 q1
the additional information
i)
greca had a contingent liability which viagem estimated to have a fair value of 450,000. This had not change as at 30september 2012
how to treat this in accounting treatment in csofp and cis?
thanks so muchokay thanks mike
SOFPHighveldt, a public listed company, acquired 75% of Samson’s ordinary shares on 1 April 2004. Highveldt paid an immediate $3·50 per share in cash and agreed to pay a further amount of $108 million on 1 April 2005. Highveldt’s
cost of capital is 8% per annum. Highveldt has only recorded the cash consideration of $3·50 per share.
The summarised balance sheets of the two companies at 31 March 2005 are shown below:
Highveldt Samson
$million $million $million $million
Tangible non-current assets (note (i)) 420 320
Development costs (note (iv)) nil 40
Investments (note (ii)) 300 20
–––– ––––
720 380
Current assets 133 91
–––– ––––
Total assets 853 471
–––– ––––
Equity and liabilities:
Ordinary shares of $1 each 270 80
Reserves:
Share premium 80 40
Revaluation reserve 45 nil
Retained earnings – 1 April 2004 160 134
– year to 31 March 2005 190 350 76 210
–––– –––– –––– ––––
745 330
Non-current liabilities
10% inter company loan (note (ii)) nil 60
Current liabilities 108 81
–––– ––––
Total equity and liabilities 853 471
–––– ––––
The following information is relevant:
(ii)
included in highveldt investment is a loan 60 million made to samson at doa. Interest payable annually in arrears. Samson paid the interest due for the year on 31 march 2005 , but highveldt did not receive this until after the year end. highveldt has not accounted for the accrued interest from samson?
I want to ask what does the meaning highveldt has not accounted for the accrued interest from samson? is that means highveldt havent recognize the interest receivable? so we need to recognize nw by debit interest receivable ct parent profit and loss and then only take out intergroup interest?
what is the accounting treatment for the interest ?I mean we subdivided for the fair value of nci at date of acquisition. I mean minus the nci portion for deferred liability at the non-controlling interest column to find the final csofp figure?
but I was not understand y the statement mentioned that on 26 march 2012, pyramid sold and despatched goods to square, which square did not record until they were receive on 2 april 2012 ? y it mention that the goods transaction havent record? is that means those 14500 is the goods that square purchased before 26 march 2012 from the pyramid?
and how was the urp on sales of inventory?for the fair value of net asset of subsidiary ltd at doa actually y the deferred tax liability will include? it not supposed only include those equity, reserve and retained earnings? actually we should + or – the deferred tax liability at fair value of net asset at doa? that means we need to – or + the group% of deferred tax liability at cost of investment (what I get from the purchase consideration) match with what I paid for investment? am I need to + or – back to non controlling interest as well?
and may I know what is the accounting treatment for a negative goodwill at consolidated income statement?
this is the full information for the question
that means there were git 1500? from pyramid to square?
I just know need to credit deferred tax liability 1 million for subsidiary ltd but I dont know where to debit it?
On 1 April 2011, Pyramid acquired 80% of Square’s equity shares by means of an immediate share exchange and
a cash payment of 88 cents per acquired share, deferred until 1 April 2012. Pyramid has recorded the share
exchange, but not the cash consideration. Pyramid’s cost of capital is 10% per annum.
The summarised statements of financial position of the two companies as at 31 March 2012 are:
Pyramid Square
Assets $’000 $’000
Non-current assets
Property, plant and equipment 38,100 28,500
Investments – Square 24,000
– Cube at cost (note (iv)) 6,000
– Loan notes (note (ii)) 2,500
– Other equity (note (v)) 2,000 nil ––––––– –––––––
72,600 28,500
Current assets
Inventory (note (iii)) 13,900 10,400
Trade receivables (note (iii)) 11,400 5,500
Bank (note (iii)) 900 600 ––––––– –––––––
Total assets 98,800 45,000 ––––––– –––––––
Equity and liabilities
Equity
Equity shares of $1 each 25,000 10,000
Share premium 17,600 nil
Retained earnings – at 1 April 2011 16,200 18,000
– for year ended 31 March 2012 14,000 8,000 ––––––– –––––––
72,800 36,000
Non-current liabilities
11% loan notes (note (ii)) 12,000 4,000
Deferred tax 4,500 nil
Current liabilities (note (iii)) 9,500 5,000 ––––––– –––––––
Total equity and liabilities 98,800 45,000 ––––––– –––––––
The following information is relevant:
(i) At the date of acquisition, Pyramid conducted a fair value exercise on Square’s net assets which were equal to
their carrying amounts with the following exceptions:
– An item of plant had a fair value of $3 million above its carrying amount. At the date of acquisition it had
a remaining life of five years. Ignore deferred tax relating to this fair value.
– Square had an unrecorded deferred tax liability of $1 million, which was unchanged as at 31 March 2012.
Pyramid’s policy is to value the non-controlling interest at fair value at the date of acquisition. For this purpose a
share price for Square of $3·50 each is representative of the fair value of the shares held by the non-controlling
interest.
(ii) Immediately after the acquisition, Square issued $4 million of 11% loan notes, $2·5 million of which were
bought by Pyramid. All interest due on the loan notes as at 31 March 2012 has been paid and received.
2
(iii) Pyramid sells goods to Square at cost plus 50%. Below is a summary of the recorded activities for the year ended
31 March 2012 and balances as at 31 March 2012:
Pyramid Square
$’000 $’000
Sales to Square 16,000
Purchases from Pyramid 14,500
Included in Pyramid’s receivables 4,400
Included in Square’s payables 1,700
On 26 March 2012, Pyramid sold and despatched goods to Square, which Square did not record until they were
received on 2 April 2012. Square’s inventory was counted on 31 March 2012 and does not include any goods
purchased from Pyramid.
On 27 March 2012, Square remitted to Pyramid a cash payment which was not received by Pyramid until
4 April 2012. This payment accounted for the remaining difference on the current accounts.
(iv) Pyramid bought 1·5 million shares in Cube on 1 October 2011; this represents a holding of 30% of Cube’s
equity. At 31 March 2012, Cube’s retained profits had increased by $2 million over their value at 1 October
2011. Pyramid uses equity accounting in its consolidated financial statements for its investment in Cube.
(v) The other equity investments of Pyramid are carried at their fair values on 1 April 2011. At 31 March 2012,
these had increased to $2·8 million.
(vi) There were no impairment losses within the group during the year ended 31 March 2012.
Required:
Prepare the consolidated statement of financial position for Pyramid as at 31 March 2012.Okay thanks mike I got it I still gt one more question to ask
There are also the other question taken from acca f7 june 2012
May I know what is the accounting treatment for the below 2 addtional information one is regards to 1million unrecorded deferred tax, cit and urp on inventory?
for the note iii) I don’t understand y the sales to square is 16000 and then purchase from pyramind 14500? It not supposed to be the same figure? and for the receivable and payable part I also not really understandOn 1 April 2011, Pyramid acquired 80% of Square’s equity shares by means of an immediate share exchange and
a cash payment of 88 cents per acquired share, deferred until 1 April 2012. Pyramid has recorded the share
exchange, but not the cash consideration. Pyramid’s cost of capital is 10% per annum.
The summarised statements of financial position of the two companies as at 31 March 2012 are:
Pyramid Square
Assets $’000 $’000
Non-current assets
Property, plant and equipment 38,100 28,500
Investments – Square 24,000
– Cube at cost (note (iv)) 6,000
– Loan notes (note (ii)) 2,500
– Other equity (note (v)) 2,000 nil ––––––– –––––––
72,600 28,500
Current assets
Inventory (note (iii)) 13,900 10,400
Trade receivables (note (iii)) 11,400 5,500
Bank (note (iii)) 900 600 ––––––– –––––––
Total assets 98,800 45,000 ––––––– –––––––
Equity and liabilities
Equity
Equity shares of $1 each 25,000 10,000
Share premium 17,600 nil
Retained earnings – at 1 April 2011 16,200 18,000
– for year ended 31 March 2012 14,000 8,000 ––––––– –––––––
72,800 36,000
Non-current liabilities
11% loan notes (note (ii)) 12,000 4,000
Deferred tax 4,500 nil
Current liabilities (note (iii)) 9,500 5,000 ––––––– –––––––
Total equity and liabilities 98,800 45,000 ––––––– –––––––The following information is relevant:
(i)– Square had an unrecorded deferred tax liability of $1 million, which was unchanged as at 31 March 2012.
(iii) Pyramid sells goods to Square at cost plus 50%. Below is a summary of the recorded activities for the year ended
31 March 2012 and balances as at 31 March 2012:
Pyramid Square
$’000 $’000
Sales to Square 16,000
Purchases from Pyramid 14,500
Included in Pyramid’s receivables 4,400
Included in Square’s payables 1,700
On 26 March 2012, Pyramid sold and despatched goods to Square, which Square did not record until they were
received on 2 April 2012. Square’s inventory was counted on 31 March 2012 and does not include any goods
purchased from Pyramid.
On 27 March 2012, Square remitted to Pyramid a cash payment which was not received by Pyramid until
4 April 2012. This payment accounted for the remaining difference on the current accounts.
