[riskyguy]

i’ve found them, more worried now 🙁

[riskyguy]

where are the f9 answers? i can’t find them!

[riskyguy]

Question 4 : my working were good, although i forgot to divide new earnings by increased number of shares, that was my only mistake

new earnings?? weren’t the proceeds of rights issue used to redeem the loan, therefore earnings remained the same, only the number of shares increased??

[riskyguy]

Receivables question:

Benefit:
finance cost savings due to reduction in receivable days
reduction in bad debts
admin costs saved

costs
advance 80% of invoice at 7% (2% excess cost)
annual fee

the offer wasn’t viable..

anyone??

[riskyguy]

i found the paper extremely hard, especially the mcqs! :@

[riskyguy]

@apoelara said:
What value did tou use for the sales price in the nov calculation?

I think the EV was 29, then it had to be inflated by 4% each year.

[riskyguy]

@piggy93 said:
I think the rest are correct except the interest paid (1800) is actually not yet deduct on retained earning else it won’t appear in trial balance.

oh, silly mistakes. Thanks for pointing them out. So we add back 1000 issue cost, and subtract 1800 interest. The SOFP balances.

There were just two mistakes, I hope the markers give me atleast 12 marks for this question. 🙂

[riskyguy]

Question 2 solution
https://opentuition.com/topic/question-2-f7-exam-solution-attempt/

@Marios

1800 should be first added back to Retained earnings and then deduct the 2610. Or just deduct further 810.

I think you’re right about that.

Deferred Tax
Balance 2500
Add: RR Tax 2400
Add: 10000*20% 2000
Total 6900 (BS)

Tax Charge
Provision 2400 (BS)
(Over) Provision (1100)
From Def.Tax 2000
To P&L 3300

Why did u add back 2500 in deffered tax calculation? wasn’t it an OVER provisions for previous year, so are u not supposed to deduct it?

[riskyguy]

@piggy93 said:
When r u going to do Q2&3?? 😀

Question 2
https://opentuition.com/topic/question-2-f7-exam-solution-attempt/

Do share your views.

[riskyguy]

Statement of financial postion

NCA
65400 PP&E

68700 Current Assets
__________________
134100 – Total Assets

Equity
40000 Shares
10290 R/E (part a)
9600 revaluation reserve (12000-2400 tax)

NCL
29810 – 6% loan
4400 DTL

38400 Current liabilities
2400 Current tax Payable
_____________________
134900 – Total equity and liabilities

[riskyguy]

Workings

Wk1
29000 OB
1800 Coupon Interest
2610 Market interest (FC)
29810 C/B (NCL)

Finance cost 2610-1800 already deducted= 810

Wk2
35000 CV of Land and Building
12000 Revalution reserve
47000 Revalued amount
(2600) Dep for the yr – 39000/15= 2600
44400 CV at 30 sept 2014

24000 CV of Plant
(3000) Dep for the yr. RBM 12.5%
21000 CV

65400 PP&E (44400+21000)

Wk3
12000 Revalution
10000 TTD

Tax rate 20%

Dr Tax Expence 2000
Dr Revalution 2400
Cr Deffered tax liability 4400

P&L (Finace cost)
2400 current tax provision
2000 Deffered tax
(1100) over provision for CT
(2500) over provsion for DT
_____
800

[riskyguy]

I hope both of you’re right. In the exam I also chose C, so I hope this turns out to be correct. My friends were whining about how tricky the MCQS were and I didn’t agree, now I realize how wrong I was.

[riskyguy]

@riskyguy said:
18 Which of the following is NOT an indicator of impairment under IAS 36 Impairment of Assets?

A Advances in the technological environment in which an asset is employed have an adverse impact on its future use
B An increase in interest rates which increases the discount rate an entity uses
C The carrying amount of an entity’s net assets is lower than the entity’s number of shares in issue multiplied by its share price
D The estimated net realisable value of inventory has been reduced due to fire damage although this value is greater than its carrying amount

Those who were saying that the answer for Q18 is D, were right n were wrong as well. Their reasoning was that NRV is greater than CV so its not impaired. Their reasoning is wrong but their answer correct.

IAS 36 does not deal with inventory, IAS 2 does. That is why option D is correct.

[riskyguy]

@tatiaaaaaaa said:
Unfortunately, I have not even touchd to Q1 😀

Also time was out.

I left it for the end. But I did attempt it though because there are easy marks in every question, so no question should be left unattempted. Would be happy with 5-6 marks from Q1. 🙂

[riskyguy]

@tatiaaaaaaa said:
Also, Can you share your results about consolidation statements?

MCQ-s and Q3 are my hopes for reaching 50 points. But I am not sure. Anyway, today I have started reading theory book of F7. For June exams 😀

In addition, this was my first ACCA exam and I like the way you are sharing your experience and results. It is very useful 🙂

Thanks all 🙂 🙂

You know what, maybe I’ll do question 2/3 and share them here. Don’t even want to see Q1 again.

[riskyguy]

@tatiaaaaaaa said:
Dont you think that unwinding of discount increases a finance cost (PL) and have not be capitalised? I read it in chapter 2.(Tangible non current assets). different opinions, please share 🙂

Searched a bit, B is the correct option for Q17 🙁

(Post # 5)
https://opentuition.com/topic/unwinding-of-discount/

[riskyguy]

@xlnc123 said:
Hopefully we get more than 50% but question 1 killed me. Doesn’t make sense even after the exam lol

IA, oh yes, Q1 also had me in trouble. I wish the question was just to calculate the same ratios for another company, it would have been great 🙂 But I think we will still get marks for valid points made in discussion even if our ratios were calculated wrong. I think I should have redrafted the P/L, it would have become easier then. But I tweaked only those things that had to be used in the ratios, which resulted in many mistakes.

[riskyguy]

@xlnc123 said:
So HCA is agreed but how do you get the other number? 384?

SP 600000
RV 60000 = (600000×0.10)
Dep. 600000-60000/5 = 108000 x 2 = 216000

600000 – 216000 = 384000

[riskyguy]

@xlnc123 said:
I didn’t choose D as receivables are already an asset.

A is def wrong.

So my process of elimination was B or C

c could be wrong because it’s deferred liability. (Never understood why) but it offsets expenses

Option D, how I understand it now is, the examiner is asking us, the receivables were sold to a finance company, but the finance company has full recourse, so should they be (still) recognized as an Asset.

Yes, as the finance company has full recourse they should still be recognized as an Asset, common adjustment in Final accounts question. But well I maybe wrong on this one. I remember choosing one from B or C. A was definitely wrong.

[riskyguy]

@xlnc123 said:
Fair point.

I read current price as fair value. Current price would dictate replacement cost.

Exactly, I don’t remember my answer though, so not counting marks from this mcq, prudence concept :). But I hope i got it right, I thought abt it a lot in the exam 🙂

[riskyguy]

@xlnc123 said:
It’s definitely a. On the balance sheet date, it was revalued hence no depreciation would be charged.

It’s not about revaluation. That’s the current price of the NEW plant that we have with us. A new and a 2 yr old plant cannot be of same value.

[riskyguy]

Q7 is D as the finance company has full recourse this receivable should not be written off and must be shown as an Asset in B/S, and the sale proceed as deferred income. I chose B or C though 🙁

[riskyguy]

@xlnc123 said:
IA we are right

Any other answers that you didn’t agree with

Yes, I don’t really remember my option for MCQ 3, chose A or B maybe. But I think B is the right option. Accumulated depriciaton would have to be deducted from the plant. A new plant and a two year old plant both cannot cost 600,000

[riskyguy]

@xlnc123 said:
I still think we are right lol.

Ameen

[riskyguy]

@xlnc123 said:
Ah I see

Share your vision with me 🙂

What do you think. B or C

[Author]

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