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Dec 2014 for cash in transit and dec 2015 for goods in transit. I compared the two.
will 400 be added to Bank in Current Assets or Subtracted from bank in Current Liabilities?
Moston commenced a research and development project on 1 January 2015. It spent $1 million per month on research until 31 March 2015, at which date the project passed into the development stage. From this date it spent $1·6 million per month until the year end (30 June 2015), at which date development was completed. However, it was not until 1 May 2015 that the directors of Moston were confident that the new product would be a commercial success.
Another question. I understand that in the above statement 4600 will be charged to cost of sales. But I am confused about the treatment of the 3200? I know it will be capitalised but where will it go in the SFP?
Sorry. here is the adjustment I was asking about. Is it relevant?
(i) The balance on the construction contract is made up of the following items:
Cost incurred to date $14 million
Value of contract billed (work certified) $10 millionThe contract commenced on 1 October 2012 and is for a fixed price of $25 million. The costs to complete the contract at 30 September 2013 are estimated at $6 million. Moby’s policy is to accrue profits on construction contracts based on a stage of completion given by the work certified as a percentage of the contract price.
Is this a part of the syllabus or should I ignore it? since you said Revenue is not a part of F7 anymore
Thanks! :/ I mentioned the exam year for reference. The questions are based on IFRS 15.
Where did you find this question? Also post this question in Ask ACCA tutor forums and you will get the right answer there
There is cash consideration in every question but they have subtracted it from the equity investments in only a couple of them.
Could it be the equity investments? I don’t see 13500 anywhere in the Polestar SOFP
I didn’t understand the Profit margin is 25% so profit is $200,000 giving an invoice value for the service of $800,000 part
How did you calculate $800,000? and what about the $600,000 Cost of servicing?yes I do. Ok so I’ll practice the mini-exercises from opentuition as well as the revision kit. Thanks a lot.
Right! I’ll do that. Also I am very concerned about all the mcqs in section A amd B. I have the most difficulty getting those correct. So how to prepare for those? Will doing the opentuition mini exerises be enough?
thanks a lot for the suggestions. Do I need to practice ratios as well or can I leave that topic?
Another question! Sorry for asking so many questions. In the answer, under NCA a depreciation of 500 has been added to PPE. why is that? Don’t we Always subtract depreciation?
Another thing I fail to understand, even after solving so many questions and watching lectures is the calculation of Consolidated retained earnings and NCI. In every question, I see different elements being added and subtracted in the calculations. Is there a format or something that can help me with this? For instance in this question, while calculating Consolidated retained earnings unrealised profit is being subtracted and in the previous question (dec 2013) URP was added in the calculation of Post acquisition NCI.
Kindly clear this confusion for meThanks a lot.
I have one more question, one of the adjustment says Strata’s current account balance with Paradigm at 31 March 2013 was $2·8 million, which did not agree with Paradigm’s equivalent receivable due to a payment of $900,000 made by Strata on 28 March 2013, which was not received by Paradigm until 3 April 2013
In the answer 3700 is deducted from the receivables and 2800 is deducted from trade payables. And I don’t get why.
My understanding of cash in transit adjustment is that the payment that is made by one party to another is deducted from the consolidated receivables and added to cash or bank under current assets. And the amount that is outstanding after the payment, is deducted from both receivables and payables.Am I wrong?
Another question
If P sells goods worth 50 to S and S sells all of them to third party by the end of reporting period there will be no unrealized profit to adjust, right?
ohh ok I get it now. I thought the 10000 includes the 6000 paid by parent.
thanks a lot
You are right according to the solution in the book but I don’t understand why are we subtracting 10000? the question says At 31 December 20X4 P owed $10,000 to S.
After S received 6000 from P, shouldn’t the remaining balance be 4000? which would then be subtracted from the receivables and payables?
