BPP Kit Mock 2 (Sep16 CBE) & Mock 3 (Sep16 PBE)

Hi Sir,

Please help with the questions below. Thanks in advance.

BPP Kit Mock 2 (Sep16 CBE) & Mock 3 (Sep16 PBE)

Mock 2(Sep 16CBE):

11. Why Option A “The company has good Capital Management” is wrong?

I think it should be a good capital management as the Cash and equivalent increases by the YE.

29. How to calculate the impact of the Property revaluations on income Tax expense for YE 31Dec20X5? Don’t we have to consider the Depreciation?

From the standard answers solution, why the tax expense calculation doesn’t involve any “Gain on Revaluation Gain (2.5m-0.5m)?

Q31. I’m confused with the impact of Revaluation to Deferred Tax.
When I calculate the Tax expense charge to PL,
I uses “Tax Provision 2700+ Underprovision 700 + DT Movement (-800)) =2600
When I calculate DT Movement for above, C/F 12000*20%- B/F 3200=(-800).
From above, the DT value doesn’t involve any Revaluation

However, when the answer in Kit calculates DT Liability, it uses “Closing Liability 12000*20%” +” Tax on Revaluation Gain 7800*20%= Closing DT Liability 3960.
Why is it?
Why the DT Liability C/F done for calculating Tax Expense doesn’t need to include the impact from Revaluation Gain?

Would you be able to explain how would you resolve the Q31 note (iv) regarding Tax (W3)?

Mock 3 (Sep16 PBE)

5. I cannot recognise the answer at back, can you pls advice the Correct answer?
T think from top to down: T, F, T, F

21. I cannot recognise the answer at back, can you pls advice the Correct answer?
I think: the first Description: True, Second Description: False

22.Why “Option B: On 1 December 20X3 the acquisition was completed, following lengthy negotiations which began in Sep 20X3” is a Non-adjusting event?

The answer says it doesn’t provide evidence of Condition existing at YE, but I feel since the negotiation began in Sep 20X3, most people should have been aware of it and know there’s something going on=> which’s the evidence of Condition existing at YE, therefore should be adjusting?

For Non-adjusting, I feel it’s more like an accident which we cannot foresee. (i.e. Fire…etc).Therefore in this case, I don’t think it’s Non-adjusting.

Thank you very much.