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@raoul7370 said:
I have now seen the actual paper (both INT and UK versions).

There is no problem with doing Q1 first, and to those saying it is too long, I was surprised (given comments on here) about how NOT long it is.

Now before the usual suspects moan, let me explain:

– The intro page, and requirements (Exhibit 1) take only 2-3 minutes to read and digest. Almost all of the marks are for predictable, frequently-asked requirements, and students should have techniques, tried and tested, to use immediately on these.

– Only 1 paragraph needs to be read from Exhibit 2 to be able to get going on the integrated reporting request. OK, this means you do not know it is a listed company yet, but there are plenty of other obvious E+PI marks from reading virtually nothing.

– Only a couple of paragraphs need to be read from Exhibit 5 to answer the audit strategy bit. No testing of controls (examined before, including on my mock exam, just saying) is an F8 level point. Using client’s staff to assist audit of a subjective area, far from a high level point to test. And also makes receivables an audit risk, if they go ahead.

There is only 1 exhibit which is large, and that is the FS. So leave it till last. Common sense. Just use it for some ratio calcs, then get out of there. Even saying that, the notes to the FS are usually the best place to find useful audit risk info, not the numbers, and the notes are in nice bite sized chunks.

Add to that the huge amount of this exam which is amazingly similar to the specimen paper (which I sense a lot of students did not know existed, let alone had practised), and I think this paper is fairly generous. If anything, I think the accounting in the other questions is the harder technical bit.

One more point. Exams are NOT about knowledge, nor should they be. A parrot can memorise things. And now we have the internet, knowledge is far more freely available. To be useful in an office you need an ability to apply that knowledge under time pressure.

Oh and 1 more point. Students are a stakeholder, correct. But the aim of exams is surely to be part of the preparation that supplies useful people to the accountancy profession, thus protecting accounting firms and their clients and those who use financial statements. The exam process is to test you. It is not FOR you, if you get my drift.

Please be clear – I have complained about things in exams in the past and will continue to do so. But I cannot see anything to complain about for this paper at this sitting. Those complaining about time, length of paper, are hideously under-prepared, whatever they may believe.

Tough but fair, which is what it should be each time.

Good luck for results day everyone.

What do you mean by ‘If anything, I think the accounting in the other questions is the harder technical bit.’ Were there any catches in the other questions, which were hard enough, as I am getting worried?

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@dipatil said:
I have the same… what about the other question in section c the company shall go for discount right the factoring was expensive

Same here, I don’t remember the exact answer if the discount method was used but the factoring was (80,000).

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@seishirou said:
@@ I remembered that I re-read many times the questions state that the fixed cost is also in nominal term. Anyway, I think that the answer applying nominal or real team may not significantly vary

Same here, I don’t remember the exact answer if the discount method was used but the factoring was (80,000).

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@dicky123 said:
Agreed, which is why the car in the main pool is disposed for £17,200 rather than £18,100.

“On disposal of the asset, a balancing adjustment is computed by deducting sale proceeds from the tax wdv (there is a balancing charge if sale proceeds exceed tax wdv, and a balancing allowance if sale proceeds are less than tax wdv).
Having computed the balancing adjustment, the amount assessed or allowed is then reduced to the business proportion. A balancing allowance is then added in to the capital allowances of the period whereas a balancing charge will reduce the
capital allowances. If a balancing charge exceeds the allowances available then the net balancing charge is added to the adjusted trading profit of the period.”

I am not sure if this solves the question, but I am quite sure I have seen that if there is a sale of the full amount of the asset – the computed balancing allowance/charge is the only WDA computed in Capital Allowances.

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@dicky123 said:
I agree with you on that but at no point does it mention that this company is in its final year of trading therefore no balancing allowance is permitted in the first place only a writing down allowance.

“Sale of plant and machinery
When plant and machinery is sold in the accounting period the sale proceeds, up to a maximum of the original cost of the asset, is
deducted from the balance of the unrelieved expenditure of the relevant pool.”

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@dicky123 said:
I disagree with your capital allowances calculation. My understanding is that the special rate pool continues to be written down at 8% even though everything in it has been disposed. You only get a balancing allowance (£3100 in your calculation) if the company/individual is ceasing to trade. The WDA on the special rate pool is 8% x 3100 = £248. Total capital allowances = 9576 + 248 = £9824.

It’s so tempting coming on here to compare answers but I think now I’m just going to wait for the results as coming on here only serves to undermine each other’s confidence!

If you have balancing allowance it means that no WDA can be used in the final year, thus only 3100 can be written off as Capital Allowance for the year.

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@huzaifa11 said:
For question 32 regarding Online LTD income :

Trading Income £896,700

++ Depreciation £21,660
++ amortisation £9,000

Total Trading Income £927’360

LESS:

Lease (90’000 x (10-9) x 0.02)=16200 (90k-16.2k/10) (£7380)

Capital Allowance (£12676)
working 18% I 8%
MP I SRP
56700 I 12400
13700 I
(17200) I (9300)
——————————-
Allowance 9576 + 3100
———————————————————
TTP £907’304

QCD (£6,800)

Disposal of Shares

24 June 2010 40,000 shares @ £49,300

sold 22,000 for £62,200

22 000 (22/40 x 49300) £27’115 index (@0124) 3362
———————————————————————————
Gain 1 = £ 31’723

Gain 2 = £ 64’644

sold 18’000 for £90,600

(18’000) @ (£22’185 + index 3771)

Net gains (£ 64’644 + £ 31’723 – 4700) £91’667

Property loss (12500)
—————————————————————————————————-

TTP £979’671

b) Corporation tax can be reduced by transferring the capital gains/losses to another company in the group. join election must me made

Why do you include Gain 1 in your calculations? Isn’t it gain/loss for Y2013?
About b/ it is written that Offline Ltd is profitable and will pay regular dividends to Online. I guess acquisition will therefore affect the difference between big and small company (quarterly payments vs one payment).

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But why not 300,000 x 4/12 x 0.03? As long as I remember it was written something about accrued interest over the amount of 300,000.

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