[nickology]

Wow, passed APM on first attempt! That makes 3 professional exam passes in one year!

[nickology]

This is what i found:

asset beta = equity beta / (1+(1-taxrate)*(debt/equity ratio))

I assumed asset beta to be equity beta, so i was wrong.

I remembered there was one question on profitability index in section b. i got 0.6 i think. wonder what the other got.

[nickology]

I guess there are two different variants of the F7 paper, with section C being the same for both of them. Found it weird that when some of you guys shared your answers for section A, the first question was about financial instruments. Mine was about Impairment. Wondering what is the correct answer for that question.

[nickology]

For your second question, my answer was 248, 000.

The 200,000 was an estimate for the previous year, but it was confirmed as 180,000. This meant that there is an over-provision of 20,000. deferred tax adjustment of 8000 plus the current year estimate of 240,000 will give a figure of 248,000. Now imagine this is added to the credit side of the ledger with last year’s estimate of 200,000. The “T-account” will look like this:

DR tax paid 180,000
DR over-provision 20,000

CR last year estimate 200,000
CR Deferred tax increase 8000
CR Current year estimate 240,000

That will leave a dr balance of 248,000, that is the tax charge to Profit or Loss. Of course, that was how i visualised it. I could be wrong.

[nickology]

Hi, i believe the right answer will be to deduct 2400 which is the share of the unrealised profit from the investment in associate. If you remember from the text, this is an upstream / downstream transaction. (Doesn’t matter if it’s upstream or downstream, because the treatment is the same).

Profits and losses from these transactions are eliminated to the extent of the investor’s interest in the associate. This is very similar to the elimination of intra-group transactions between a parent and a subsidiary. The important thing is that ONLY the group share is eliminated.
the double entry will then be:
DR Share of profit of associate
CR Investment in assoiate

Hope this helps. 🙂

[nickology]

hello new to this forum. Anyway i’m curious on a few issues:

1) what did you guys get for the profit / loss on discontinued operations figure in question 31. I think mine was a loss of 1300.

2) In question 31 or 32, did anyone account for the 700,000 selling costs in any way? I added back the cost portion of the 700,000 selling costs into inventory.

3) First answer of the very first question of the paper.

Hope someone can help me. Thanks in advance. 🙂

[Author]

Posts