[Ati]

Q6 explanation:
total profit=5m-(1,6+2,4)=1m
proportionate profit=1,8/5X1m=0,36m

cost incurred=1,6m
+profit recognised for the period=0,36m
-progress billings=1,8m
=1,6+0,36-1,8=0,16m=160000

Q19 explanation:
340000-90000=250000
finance cost=250000X0,1=25000
depreciation=340000/5=68000
2. leased item=18000/12X9=13500
In total=25000+68000+13500=106500

[Ati]

Nadia,
in section B, Q2 (for 15 points) what did you get for adjustments to retained earnings?
I got for (i): 2610 as finance cost, (30000-1000)X0.09, I did not deduct the 1800, and should I have considered the effect of tax for that, as retained earnings have net profit? I did not see this taken into consideration in previous answers and the 20% tax rate is only mentioned in part (ii)

[Ati]

@riskyguy said:
hmm I think you’re right about 2 and 16.
Anyway, how did you get B for 17, and u sure about 18?

seabed restoration: 250X10000
dismantling: 30000000X0.68X1.08 (8% is the increase of the provision for the year)
the two of them together is answer B

[Ati]

@nadia2105 said:
riskyguy,

Here are my answers to the MCQs (quite a lot of matches :))
1-a
2-c – options 1 and 4 will be included in the calculation of basic EPS anyways
3-a
4-c
5-c
6-b
7-d – a secured loan?
8-d
9-a
10-d
11-a
12-a
13-b (not sure though)
14-c
15-a
16-a (bargain purchase)
17-b
18-d
19-b
20-d

good luck all 🙂

I had the exact same answers except for Q3, since then I realised that for Q19 the correct answer is C,
As for Q3, I dont know the correct treatment for CCA (I never saw it in the book), but it would be logical to deduct depreciation for 2 years from 600K, because for 600K you could get a brand new asset and it would make more sense to find a replacement price for a 2 year old asset, which we actually have in our question, therefore I chose B

[Ati]

I think D is the right answer to Q20, because whatever policy we apply to something new we do not have anything to compare it with, as it is the first time we get engaged in that type of transaction

[Ati]

Hi guys,
I dont understand the C or B as answers to Q18, I chose D, which says that the NRV has been reduced but it is still higher than its carrying value, that to me means that there is no impairment to speak of, so it is not an indication. I do not know where my thinking is wrong.

[Author]

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