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The exam was hard, a few fairly straight questions but the majority of MCQs were quite tricky, no as straight forward as they seemed. C section was not easy, I really hoped that consolidation would come up!
In Q31 I do not think you had to dedcuct the subs results.I didn’t split out the results of the subsidiary because it didn’t say anything about the loss occurring evenly/not, nor when the goodwill was written down.
I did talk about it quite a lot though and how it may have effected things, also brought in how the gearing had been lowered.
For the profit/loss on disposal I worked out a profit of c800k (I think). I worked out the goodwill at acquisition, then did the value of the subsiduary at acquisition as what it cost, took off half the goodwill for the impairment, added the revaluation and took off the post acquisition loss. That came up with a figure about 800k below the £9m they got for it I think.
Not entirely confident that was right but we will see.
I found the revenue part of section B the trickiest I think.
I thought it went quite well at the time but as I read though these posts I start to get worried!
Paul I agree as the question asked for the p/l on disposal in the confiscated accounts. Simply look at the sale proceeds less the net assets at date of disposal and cv of goodwill. No neeed for apportionments as the sub disposed was 100% owned.
Then what was the profit/loss on disposal of the subsidiary? Anyone remember the answers of their MTQS?
Q32- how did you treat the inventories? I have adjusted 20X4 retained earnings increased them by the 300K.
In 20X5 i have deducted the difference -150K- from Cost of salesI got 850 , and I apportioned the profit between the disposed and existing operations
For the inventory figures I treated it retrospectively and I did it for 2004 by adding opening inventory and deducting closing inventory, I added 150 to retained earnings for change in accounting policy
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what about overstated inventory in mcqs? does it reduce RE and GP or not? i said it would reduce both of them.
Hmm… but why it reduces RE? To get the RE you need to adjust as well prior year results – so the change is overall 0…..
Am I wrong?section A & B was not all that hard section c was ok in some cases 32 was a little bit tricky but 31 was the worse for me
I’m not sure but since we changed the profit of prior period we change the same to present retained earnings to show a consistent comparison
I found the last question too easy as well. I thought I need to spend a little more time in the question. But i feel like the exam was okay, Hope it was my last time sitting
Think the afternoon CBE exam had different questions…
Q36 was on a single entity with adjustments to make to prepare a statement of profit or loss & other comprehensive income and a statement of changes in equity & extracts from the cash flow.
Q37 was on a group with two subsidiaries where one is disposed, had to work out the profit/loss and calculate ratios.
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well, i think since the goods were overstated the cos was understated, which means we need to reduce Re and profit to reflect this.
Multiple choice
Ps questions not in order
1. FV of Investment $300,000
FV of NCI $80,000
Net Assets
Stated Capital $150,000
Retained Earning $150,000Answer – Goodwill $80,000
2. What would be reviewed for impairment
Answer – Goodwill and Patent with indefinite life
3. Which qualitative characteristic is linked to IAS 8 changes in accounting policy, estimates and errors
Answer – Comparability
4. Which one of the following is correct according to IAS 8
Answer – Changes in depreciation and changes in inventory valuation (FIFO) would be treated prospectivly
5. What is the definition of Inventory according to IAS 2
Answer – purchase cost, conversion cost and costs incurred to bring the asset to its present condition and location
The other option is wrong i believe
purchase cost, conversion cost and costs incurred to bring the asset to a saleable condition
6. Which of the following would be treated as discountinued under IFRS 5
A. Plant which stops buying and selling car parts
B. They only have one plant the produces rims. They buy another plant to produce rims
Answer – A only
7. State the Enhancing Characteristics of Financial Information
A. Substance
B. Prudence
C. Materiality
D. Timely, verifiable, comparable & understandableAnswer – D
8. Basic eps 9mil ÷ 10 mil = .90
Diluted earnings
5mil × % × 70 %
If anyone knows this % pls tell meDiluted Shares
5mil ÷ 500 × 250 shares = 2,500,000Answer = .74
Thats all the MCQ i can remember sorry guys
Got the feeling CBE questions are different for every person orbat least every a few different persons? Q36 was ratios, i think i did ok there. Q37 was a consolidated FP which I didn’t finish but did most of the workings. Secn B left a couple unanswered, no time to go back. Answered all Secn A which I think was OK too
Let’s cross check our multiple choice answers
C
C
A
B
A
B
A
D
D
B
D
C
D
C
A
B
A
C
C
C
C
D
B
B
C
C
A
B
C
BHow do you people have time to memorize what your MCQ answers were?? I barely have enough time during the exam to read each requirement once lol
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