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Hi All…
Hope Everyone has done well, acctually I have a question in section A , ( Relating Green Co. And Blue co., Green co acquired 30% of Blue co and Blue co selling to Green making profit of 40,000 where invetory held at green co that is 20%) how the unrealised profit will be treated ?Options were :
A.Deduct 2400 in Investment in associat
B. Add 2400 in Inventory
C. Add 8000 in Investment in associate
D.Deduct 8000 in InventoryI believe answer would be deduct 2400 in inventory , but there was no option …pls suggest wo remember the question well…..
One more question relating tax to be charged in P/L , where it was stated that current year estimate is 240,000 and previous year tax charge in P/L 200,000 but tax authority confirmed 180,000 . at the year end deferred tax provision has increased by 8000 .this includes any revaluation gain above .( Revaluation gain was 500,000 and related deferred tax was 150,000)
Options were :
A. 248,000
B. 240,000
C.212,000
D.228,000What will be the correct ans ..pls comment ….
Hi, i believe the right answer will be to deduct 2400 which is the share of the unrealised profit from the investment in associate. If you remember from the text, this is an upstream / downstream transaction. (Doesn’t matter if it’s upstream or downstream, because the treatment is the same).
Profits and losses from these transactions are eliminated to the extent of the investor’s interest in the associate. This is very similar to the elimination of intra-group transactions between a parent and a subsidiary. The important thing is that ONLY the group share is eliminated.
the double entry will then be:
DR Share of profit of associate
CR Investment in assoiateHope this helps. 🙂
Thanks for the reply …but as I remember the option to deduct 2400 from inventory were not there ………or by oversight I got confused ….I knew the correct ans although couldnt apply due to provided option ……….or I think I messed completely …..
For your second question, my answer was 248, 000.
The 200,000 was an estimate for the previous year, but it was confirmed as 180,000. This meant that there is an over-provision of 20,000. deferred tax adjustment of 8000 plus the current year estimate of 240,000 will give a figure of 248,000. Now imagine this is added to the credit side of the ledger with last year’s estimate of 200,000. The “T-account” will look like this:
DR tax paid 180,000
DR over-provision 20,000CR last year estimate 200,000
CR Deferred tax increase 8000
CR Current year estimate 240,000That will leave a dr balance of 248,000, that is the tax charge to Profit or Loss. Of course, that was how i visualised it. I could be wrong.
Yes there was overprovision of 20,000 which decrease the tax liabiality in current year ( not increases ) I feel tricy part is there in deferred tax ..question said increased provision by 8000 but this includes related revaluation gain ……
Year end estimate 240,000
Less: over provision ( 20,000)
Whether add or less **8000**I feel ans will either be 228000 or 212000 …mine was 212,000 May be wrongly anwered …not sure
HI all
I found the CBE f7 exam really challenging!!
whilst looking at the comments posted so far, i dont recognize a lot of the questions. Upon comparing with my friend that did a paper based i think we had a different paper.
did anyone else, who did CBE, find that it was different then the paper based???
Really curious!!!!!!!
Hey, you gotta hear this one!!
I spoke to acca examining team and they said that there were two sets of papers and the questions were different!!! this depended on if you sat the exam in the morning or afternoon……… ;( shame, i think the one in the afternoon was harder………. 😉
@mannu388 said:
Yes there was overprovision of 20,000 which decrease the tax liabiality in current year ( not increases ) I feel tricy part is there in deferred tax ..question said increased provision by 8000 but this includes related revaluation gain ……Year end estimate 240,000
Less: over provision ( 20,000)
Whether add or less **8000**I feel ans will either be 228000 or 212000 …mine was 212,000 May be wrongly anwered …not sure
was this question related to the deferred tax scenario?
Do you remember the question which had options like
Receivables 0
Payables 5000 or something in the deferred tax scenarion mcq section?@fradel said:
Hey, you gotta hear this one!!I spoke to acca examining team and they said that there were two sets of papers and the questions were different!!! this depended on if you sat the exam in the morning or afternoon……… ;( shame, i think the one in the afternoon was harder………. 😉
No sh*t sherlock,
They give a different paper for the afternoon so that you don’t hear about the questions from the morning paper. It keeps the examination fair. No one paper is likely to be harder or easier than another. What you found hard may have been easy for somebody else!
What you found hard may have been easy for somebody else!- thats true!
did you do the CBE afternoon paper?
I did the morning paper Fradel.
I’m curious as to how different the papers were. Do you remember what the section C questions were about?
I think that section c was the same. However, section a was completely different. section b had 2/3 parts the same as the morning exam.
In section a there were many confusing goodwill, PUP and depreciation questions…
Did you have to fill in blanks for Section A and B, or were they all multiple choice?
Good luck xx I’m sure you did well
there were maybe 4/5 blanks to fill in 😉
i bet you didnt have that in the paper based exam…Thank you for your good wishes!! and g’luck with the rest of it!!!
You’re right Fradel, paper based was all multiple choice for Section A and B.
I wanted to do computer based until I learnt that you have blanks to fill in… don’t feel that’s very fair, since multiple choice is easier than blanks – you can guess an answer if you don’t know whereas in a blank if you don’t know, you have zero chance of getting it. Plus a few times I messed up my calculation and couldn’t match an answer to the multiple choices so ran it through my calculator again and got it right – you won’t have that prompt in CBE!!!!
@fashola94 said:
For agriculture I chose 57,000
For provision, I marked probable, present obligation, reliably estimated.i choose that option aswell it was option (c) I think
I guess there are two different variants of the F7 paper, with section C being the same for both of them. Found it weird that when some of you guys shared your answers for section A, the first question was about financial instruments. Mine was about Impairment. Wondering what is the correct answer for that question.
Nickology, do you have any recollection of the multiple choice questions in section a?
i found some of them pretty tricky……
Hi Everyone,
Hope everyone has done well.
I have read this forum and I have now realised where my stupid mistakes were! Grr. Fingers crossed for 17th April!
@juliebae said:
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.Honestly I wouldn’t worry. I used a black gel pen for my entire F5 exam and no-one seemed to care. I passed the exam.
I think as long as the writing can be scanned well and viewed on the computer of the marker they shouldn’t complain.
As the International accounting standards told us,investment in associate will not be composited in the composited financial statements, and therefore inventory involving unearned profit listed in associate’s balance sheet will not appear in the balance sheet of the investor, unearned profit will affect the earnings of investor by effecting the investment income which equated with share percentage multiplied by net profit of associate
@usmanhassan94 said:
i choose that option aswell it was option (c) I thinkYeah I chose 57,000 for agriculture question too. I understand they’re valued at fv..can’t remember the exact wording of the question?
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