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That was a horrible exam! Very skewed, much of the syllabus not covered
…. About 2/3 of the exam was consolidation questions but nothing on adjustments/PUPs… Nothing on foreign currencies, nothing on financial instruments, one part of a question B on EPS, nothing on provisions, nothing on inventory, one part of section B on taxation… Not a very well balanced exam at allI got the profit of 0.8 million the goodwill was I think 1300 which need to be impaired of 50% so 650 will be taken.
It had lots of consolidation and I haven’t gone through the Disposal of Subsidiary so Section C ratio question got ruined for me cause of that. Few questions are to the point. But lots of consolidation in Section A also. Around 50+ marks paper had consolidation somewhere in some form.
Disposal of sub gain of $850k, goodwill was 1300 impaired to 650.
P&L loss of about $3.04m. Deduct overstated inventory from cos, expense brand name promotion 1300, amortise patent 100, gain on IP 200 in investment income, tax refund 560 & provision was 1500 to admin expenses. 4500 already accounted in previous year so Dr expense Cr provision. Actual provision 6000, so Cr cash 6000 already recorded, dr expense 1500 & dr provision 4500 as not needed anymore.
Section a & b difficulti answered mine like this, 65 x 8.00 = 520
20 x 7.50 = 150
Total 670I don’t know if its correct
Had the same paper as you. You have to deduct dividend from the associate balance as you are adding your whole share of profit in “investment is associate”.
@tropicalesramel said:
i answered mine like this, 65 x 8.00 = 520
20 x 7.50 = 150
Total 670I don’t know if its correct
I would have thought you needed to deduct the £1.50 costs to sell from the £7.50 to get NRV, so should be £6x the 20 defected ones. Maybe wrong though!
Hello all,
To all those who got P&L question, wasn’t inventory adjustment related to prior year and we had to adjust opening retained earnings in SOCIE as we were doing P&L and prior year corrections go through Retained earnings in SOCIE? You guys are making me more worried, I think already screwed myself up in exam :)) My profit was something 10k. For disposal of Spectra (Sub), I got profit of 200.Surely if the formula for cos is opening inventory + purchases – closing inventory then a overstatement of closing inventory would reduce it therefore increasing cos? Also, If the investment property got revalued from 20,000 to 22,000 isn’t that a 2000 addition to the p and l for fv gain? Did everything else the same as you though. What were your answers for the SOCIE?
But we didn’t have to adjust in current year’s COS in P&L, as P&L is for current year whereas overvalued inventory was for prior year, instead, we will reduce opening retained earnings? am I right? For fv movement, yes it was 2000 and I think there was credit of 500 showing, that might have been rent income so I added 2000 + 500 as Investment Income. For SOCIE, I dont remember :)) I did take out dividends from Retained earnigs though, I remember..
Yes I meant 2000 investment income not 200. I think the overstatement of inventory will effect previous years closing inventory and increase the expense through the soce and reduce retained earnings b/f as 700 too much had been deducted. It will become opening inventory of current year so decrease the expense of the current year right?
I think soce was add the rights issue through share cap & share premium, deduct loss from retained earnings & take the 3000 dividend off too instead of through admin expenses as well as the prior year inventory errorI guess we just had to deduct it from the total profit of the associate and then apportion it according to the parent’s share of it.
Hi, i have done the same also, i have calculated the ratios based on the given figures
I think I am wrong but I didn’t impair Goodwill as I presumed, on disposal Goodwill is not included at closing value but reviewed annually for impairment. I am not sure if question just mentioned that GW has impaired 50% at date of disposal, if so, Goodwill should have been full 1300?
@Nicolas, I guess we had to add NCI as well.. Lets wait until six weeks and be optimistic :))
@jamesrob90 said:
One that got me was 85 items in inventory , 20’are defects so will be sold at 50% of their selling price. Selling price £15 , costs 1.50 to sell and cost of the items 8 . What’s the value of inventory, anyone get this ?Am sure I done 65 x 8 -£520 then added on £6 x 20 – £120 to get £640
Is that correct ?
I got that question as well and wrote the same answer as you. The trick was not to include the selling costs in the value of the inventory that were not defects and to only deduct from the sales price to get the NRV for the ones with the defect.
Good Afternoon, I did F9 in the March sitting,
Planning on sitting F7 in June .
i am asking for tips and also if anyone have any study material that they could share .
Will appreciate. Thanks in advanceHi.. Just want to confirm if the error in inventory is current or prior year?
I remember it as current but some of my friend told that it is prior year?@nharrowing said:
Disposal of sub gain of $850k, goodwill was 1300 impaired to 650.
P&L loss of about $3.04m. Deduct overstated inventory from cos, expense brand name promotion 1300, amortise patent 100, gain on IP 200 in investment income, tax refund 560 & provision was 1500 to admin expenses. 4500 already accounted in previous year so Dr expense Cr provision. Actual provision 6000, so Cr cash 6000 already recorded, dr expense 1500 & dr provision 4500 as not needed anymore.
Section a & b difficultHi.. Just want to confirm if the error in inventory is current or prior year?
I remember it as current but some of my friend told that it is prior year?
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