*** F7 December 2014 Exam was.. Instant Poll and comments ***

Ati, you’re right about Q3. Regarding Q19…it is just now that I saw that the operating lease payment was made on January 1..when the year end was Sept.30

Nadia,
in section B, Q2 (for 15 points) what did you get for adjustments to retained earnings?
I got for (i): 2610 as finance cost, (30000-1000)X0.09, I did not deduct the 1800, and should I have considered the effect of tax for that, as retained earnings have net profit? I did not see this taken into consideration in previous answers and the 20% tax rate is only mentioned in part (ii)

@nadia2105 said:
so we have the restorative cost of $2,500,000
then we need to add the dismantling provision value at 30 Sept 2013 – 0.68*30 mln=20,400,000
however, since we’re interested at the provision amount one year later – ie Sept 30 2014, we need to unwind the discount for 1 year -> 0.08*20,400,000=1,632,000.
when we add these three together -> we get answer B

and regarding Q18, I thought i was sure, but not anymore 🙂

I did not add the interest rate as I remeber so, that it have to be taken straight to the P&L and increases finance costs.
My answer is 22,900,000. I wonder which one is correct 🙂

Can anyone explain the calculation of Q6 and Q19?

Thanks.

@mancsi said:
Q6 explanation:
total profit=5m-(1,6+2,4)=1m
proportionate profit=1,8/5X1m=0,36m

cost incurred=1,6m
+profit recognised for the period=0,36m
-progress billings=1,8m
=1,6+0,36-1,8=0,16m=160000

Q19 explanation:
340000-90000=250000
finance cost=250000X0,1=25000
depreciation=340000/5=68000
2. leased item=18000/12X9=13500
In total=25000+68000+13500=106500

Thanks a lot Ati 🙂

I have “A” in most of them????

F7 paper is OK ..but the Question 01 is a disaster,,it is difficult to understand the Question 01 and Q 02 and 03 is easy where we get the same type of questions in the past papers

why aren’t they (ACCA) publish answers 🙁

I would be less stressed If I knew that I have min 30 marks in MCQ

Was the ‘construction contract’ actually construction contract as it only run during the same financial year? Constuction contracts must go across at least two financial years?

If I get 20 or more it will be a miracle!

My workings on Question 2 (Possibly wrong as i did not add back 1800 on the redraft statement)

Loan notes: 29000
Less:Interest paid (1800)
Add: P&L 29000*9% 2610
Total: 29810 (BS)

Depreciation & Revaluation
Asset Land Building P&E
Cost 5000 50000 58500
Accum. —- 20000 34500
Carr. 5000 30000 24000
Reval. 8000 39000 —-
Deprec. —- 2600 3000
Carr. 8000 36400 21000

Revaluation Reserve 12000
Less: Def Tax 12000*20% (2400)
Balance 9600

Deferred Tax
Balance 2500
Add: RR Tax 2400
Add: 10000*20% 2000
Total 6900 (BS)

Tax Charge
Provision 2400 (BS)
(Over) Provision (1100)
From Def.Tax 2000
To P&L 3300

Redraft statement
Retained Earnings 17500
Add back: Issue costs 1000
Deduct: Interest (2610)
Deduct: Depreciation (2600)
Deduct: Depreciation (3000)
Deduct: Tax Charge (3300)
TOTAL 6990

Balance Sheet
PPE 65400
Current Assets 68700

134100

Equity & Liabilities
Share Capital 40000
RR 9600
RE 6990

Non-Current Liabilities
Loan Notes 29810
Deferred Tax 6900

Current Liabilities 38400
Tax provision 2400

134100

Balance sheet agrees but still i think the 1800 should be first added back to Retained earnings and then deduct the 2610. Or just deduct further 810.

My thinking was that 2500 is an opening balance for Deferred tax which after the RR tax and the temp differences tax addition it would become a closing balance of 6900.