*** ACCA Paper FR December 2018 Exam was.. Instant Poll and comments ***

I feel better now that I might have picked up a few points as was sure I’d failed!
How did you depreciate the plant that had part over 4 years and part over 12? I didn’t have time so just depreciated the total by the 12 years which I don’t think is right.
What did you add to extract of cash flow?
I thought section A and B were ok so fingers crossed.

Hi all – For section C (Consolidation of SFP), i believe it was for Peraltra group – Did anyone get a negative post acqusiton? I have never seen that before but i got a negative amount as the retained earnings @ acq was higher than at the YE?

Also, i got ratios based on cash flow to help directors confusion regd why profits went up but not cash… What points did you put down? You also could not calculate any Roce questions as no financial statement was provided!

I had Final Accounts in Section-C and other was Ratio Analysis and Interpretation of Plannit Group. In Section-A and B, I was tested more on theoretical questions. Further, seeded part was in B.

Section-C was awful. Wanted to have consolidation. This seems a drawback of CBE.

Anyone had the Section-C as mentioned above?

@khilen279 said:
Hi all – For section C (Consolidation of SFP), i believe it was for Peraltra group – Did anyone get a negative post acqusiton? I have never seen that before but i got a negative amount as the retained earnings @ acq was higher than at the YE?

Also, i got ratios based on cash flow to help directors confusion regd why profits went up but not cash… What points did you put down? You also could not calculate any Roce questions as no financial statement was provided!

I got a negative reserves figure in general after I had done my workings I hadn’t seen it before and thought this can’t be right and my SOFP didn’t balance by about £24,000 ish but I had to look back at other questions so didn’t have time.

Regarding retained earnings in Peralta & Santiago. With retained earnings for the subsidiary lower than at acquisition, doesn’t that mean the sub made a loss? I had no idea what to do with that. Does the parent have to take the portion of the sub’s loss? Or does retained earnings as a whole get lowered?

Have to admit, Consolidated SoFP was something I was hoping would not come up in mine.

Just realised this now! hahahah, that’s funny. Makes me feel a bit better about how tough the paper wa.

I was doing paper based. In the last question sec C 32.
1. Where did you guys remove the impairement? ( since it happened post acquisition it shuld not be in the goodwill calculation but it shuld be removed somewhere in the consolidated statement, is it in the retained earnings?)
2. I have practiced a lot cash in transit but goods in transit confused me a bit, when calculating the figure for inventory i shuld remove profit from that amount given which was a seling price, but what other account is affected? cash?? If yes the amount will not cancel each other out as i will have to put the profit aswell, nah? what you think?

My figures were very far apart and i did not have enough time left to check why so, i think my marks will come more from my workings than figures in the statement

Yes i got negative post acquisition

And for the cash flow part, you could have mentioned somethng around the line overtrading.

I got consoI as well, something I went over the night before but ACCA always bring in something to throw you off…sigh. I did my nets assets list but did not tally it. My good will was not negative. I included the cash pad, investment cost and deferred consideration to get my cost of investment. I did my workings but did not complete my retained earnings and NCI workings and I did not worry to balance the BS as this is least important; the marks are gained from your workings. Based on everyone’s comment I don’t believe I did well in section C particularly the Consol SOFP. Anyway I will wait to see what the results are in January.

@emily1001 I got that question on Homefit too. In a nutshell, the reasons for me were the $63.2m (or was it $62.3m?) spend on Property, Plant, and Equipment; the $12.5m(ish) increase in Trade Receivables; and the $8m dividend paid.

The $63.2m on PPE was for the expansion, and with that came a lot more customers. This is reflected in the trade receivables figure being larger, but the increase was, for me, too large to just be from new customers alone. And too large to to be extended credit terms when you factor in demand for one of Homefit’s key products (insulation) outstripped supply.

It was my conclusion that Homefit’s expansion was perhaps too much for its credit control department to handle, and that additional staff may be required.

I also questioned the wisdom of paying the $8m dividend when Homefit had to take out a $20m loan to part-fund the expansion. They could have simply not paid the dividend, and taken out a $12m loan. The cash position would be pretty much the same, admittedly, but they’d incur less interest in the future.

I also noted the $7.5m(ish) increase in Trade Payables was explainable by Homefit negotiating extended credit terms with its major suppliers, and that this was a sound move during the period of expansion. At the end I focussed on the positives: growth in gross and – more importantly – operating profit, and interest cover being a little better than the prior year.

I enjoyed this question. Maybe I read too much into the increase in trade receivables, but overall I feel I did very well on it.

@nighteyes said:

@emily1001 I got that question on Homefit too. In a nutshell, the reasons for me were the $63.2m (or was it $62.3m?) spend on Property, Plant, and Equipment; the $12.5m(ish) increase in Trade Receivables; and the $8m dividend paid.

The $63.2m on PPE was for the expansion, and with that came a lot more customers. This is reflected in the trade receivables figure being larger, but the increase was, for me, too large to just be from new customers alone. And too large to to be extended credit terms when you factor in demand for one of Homefit’s key products (insulation) outstripped supply.

It was my conclusion that Homefit’s expansion was perhaps too much for its credit control department to handle, and that additional staff may be required.

I also questioned the wisdom of paying the $8m dividend when Homefit had to take out a $20m loan to part-fund the expansion. They could have simply not paid the dividend, and taken out a $12m loan. The cash position would be pretty much the same, admittedly, but they’d incur less interest in the future.

I also noted the $7.5m(ish) increase in Trade Payables was explainable by Homefit negotiating extended credit terms with its major suppliers, and that this was a sound move during the period of expansion. At the end I focussed on the positives: growth in gross and – more importantly – operating profit, and interest cover being a little better than the prior year.

I enjoyed this question. Maybe I read too much into the increase in trade receivables, but overall I feel I did very

Ok I did kinda that too I commented on more PPE, trade receivables, loans and HP and general expansion and using inventory. Might of got a few marks maybe. Also a bank over draft if there was one effecting cash flow.

Thanks

result is coming