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Hi all,
How did we find the exam? It was pretty fair.
From what I can remember:
Section A : okay, wasn’t sure on that group profit and NCI?
Section B: for the revaluation on property and plant, I offsetted the impairment to the gain giving me 225k?
Section C: share issue of 32m loan of 150m and nci of 9m, the provision confused me and ended up deducting from net assets to give me goodwill? Think I should of added and it would of been added to ppe.
Am I right in thinking we had 2 PUPs?? One for the inventory then the additional for the 700k?
Question 31 was okay, I adjusted for the rent and management charges based on the actual figures then took off the non core?
Sean
Hi,
Question 31 – I disregarded additional notes (ii) and (iii) related to management fees and rent because in P&L because there’s no acquisition transaction yet. During a year a potential purchaser only considered a purchse but it hadn’t occur.
I just added a line for discontinued operation profit and loss on disposal.Anyone else did that like me? 🙂
Thanks,
Stevo
I used black ink gel pen to fill & write my answer. And I also used a lot of correction tape in my written answer. I realized that I am not allowed to use both of them and I’m worried that it would affect my score. I made sure nothing was smudged, and everything is clear if you look at my answer on the paper. But I’m afraid correction tape will melt during the scanning process or answers written over the correction tape will not show. Please let me know if these would affect my score, I’m very worried.
Can anyone share section B answer. Taxation part only. I did the remaining two sections well. Can anyone share all the answers thanks?
Q32- my balance sheet balanced at $197600, anyone else got the same? 🙂
Q31- adjusted for ii and iii, deducted discontinued operation (revenues, CoS, opex), and no adjustment on 1.5 loss on disposal. Overall i suggested it would be ok to make the acquisition as ratios were better than industry..I added the 4m provision to assets for the goodwill calc but I discounted the loan like deferred consideration when I should have added on a finance cost. Sh*t!
Sean, The provison confused me as well. I assumed given that it was at the date of acquisition it was included in the goodwill calculation also. Not sure whether that was the right thing to do. I did the same as you for question 31. I found the multiple choice quite tricky with some question types I didn’t see in the bpp kit. Phil
Hi all 32 C section Goodwill calculated 21450. Right, confused 4000 provision plus.
Hi
Got 7000 for my goodwill..
32,000 shares consideration
15,000 for loan note
9000 for nci
Fv adj 4000
Shares 20000
Retainee earnings cant remember@ritaalbu said:
Q32- my balance sheet balanced at $197600, anyone else got the same? 🙂
Q31- adjusted for ii and iii, deducted discontinued operation (revenues, CoS, opex), and no adjustment on 1.5 loss on disposal. Overall i suggested it would be ok to make the acquisition as ratios were better than industry..Almost same thing I got but dint balance
Got 15,000 goodwill…
Shares 32,000
Loan Note 15,000
NCI 9000Shares 20,000
FC Adj (4000)
Retained Earnings 25,000 (19,000 + (8000 x 9/12))Oh so the fair adjustment should be in yacket?
Is it beacause its a decomissioning cost or why?what was the answer to question 30 about FV valuations and depreciations?
I’ve put 1 only.31 I saw it as a discountinued operation so disclosed sperately, took out the 1.5m loss from operating expenses. Then as the non core activities were included as notes deducted these from rev / cos. Assumed the 10% management charge was included in revenue so reversed this and revised for new charge / rent. Scratching my head now because although it didn’t acquire surely it wanted us to make adjustments assuming it had and calculate ratios accordingly. I said no buy because high gearing made it very risky!
Section A was DT heavy, one question annoying me on the deferred tax balance at 30 June X7, I went for 10500 as 50% depn first year gave TD 30000 and 25% Cap allowance on cost second gave 5000 then x by 30% tax?!
Ritaalbu, I make all the corrections in q31 for disposal (i) like you did with one exception – loss on disposal I presented separately.
But can you please tell me why should we account for (ii) and (iii)? Those transactions are fictive, never really happened during a year. I can’t remember whether anywhere in question we were asked clearly to state our opinion on acquisition… If we were asked, then I think you are right. 🙂 (ii) and (iii) are only RELEVANT costs for decision of potential acquierer about whether to acquire or not… and one more thing, relevant costs are not within of scope of F7 syllabus… why should examiners ask us to account them for in this paper? These relevant costs were already tested in f5. They are only a management accounting issue. In F7 it should be dealt only with consequences of transactions that really affected accounts. So, I saw these (ii) and (iii) as a trick in question.Please for all of you lads/guys to share your opinion on this topic.
I am quite confident that I have to be right. If I am not right, if we really needed to account these (ii) and (iii) costs which actually hadn’t been incurred in this year end P&L statement then must be:
1) that F7 paper doesn’t have a sense or
2) I should quit acca. 🙂Thanks,
Stevo
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. 🙂
Provision should be deducted at the time of acquisition @4000 and at reporting date 4080 ( 3 months interest @80) so goodwill 15000 post acquisition profit 1920.. balance sheet 191500
My answers of mcq 1-30
A
A
D
C
D
A
A
B
D
A
D
C
C
C
B
A
D
A
B
D
D
B
A
A
A
B
B
C
D
AImpairment can only be setoff if revaluation surplus relates to same asset. So according to me right answer was $600000
Hi I found the exam to be tricky. Esp Q31! I thought we had to adjust for the management costs etc to show performance of the company in the context of being acquired.
Q32, I showed no adjustment to goodwill for the provision. This is because I figured that the provision would need to be added to the cost of the mine and be depreciated over the length of the project. ie DR Asset £4000 and CR Provision £4000.
then the movement by the end of the year would be depreciation and provision increase both time apportioned.
Did anyone else take this approach?
Hi I found the exam to be tricky. Esp Q31! I thought we had to adjust for the management costs etc to show performance of the company in the context of being acquired.
Q32, I showed no adjustment to goodwill for the provision. This is because I figured that the provision would need to be added to the cost of the mine and be depreciated over the length of the project. ie DR Asset £4000 and CR Provision £4000.
then the movement by the end of the year would be depreciation and provision increase both time apportioned.
Did anyone else take this approach?
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