*** F7 June 2012 Exam was… Comments and Instant Poll ***

Hi JM84

If you have an accumulated deficit on “retained earnings” you would continue to show it in equity, but as a bracketed figure and deduct it from share capital + share premium in calculating the figure for equity

Hi MikeLittle

Can I ask if the retained earning become negative after adding this year losses, how should we adjust it? Against share premium? I really stuck in this today, but strange I manage to balance the SOFP by including a negative balance in the retained earning.

Exam surprisingly ok although Q4b totally threw me and hopefully managed to do ok in the rest. Thanks for your help open tuition.

i thought the exam was fair and the questions were as expected, apart from the odd hidden trickery! lol hoping for a pass but for some reason q.2 threw me and it shouldnt have done! think my brain was just full of consolidation and cash flow! loved the second part in 3. ace! good luck to every1!

@razraz said:
Q1 was absurd and crazy. It was nOt normal. The rest were fair. Hope to get 50. But don’t really understand this examiner. Considering 56 percent pass last time he wants to drop it again down to 28 percent.

Ya, I also think that he tries to lower the passing rate because 56% is a little bit too high.
Question 1 actually not tough, but just that is is not so common. I spend a lot of time figuring the cash in transit and good in transit problem, and whether there is unrealised profit (i think there is unrealised profit of $500 because of the good in transit).

Question 2 is very time consuming. The fraud i do not know how to adjust for the current year one $3000. Add to cost of sales? or add to admin expenses? Prior year one need to adjust the statement of chanding in equity. The adjustment in leases is also a little bit challenging.

Question 3, the cashflows part are easy. But the interpretation part actually quite tough because of the time constraints.

Question 4: Impairment, also a little but tricky, but I don’t consider it unfair as it is a part of the syllabus just that I did not study well for that.

Question 5: IFRS is principle based. I only have a quick glance on that part in BPP, so manage to write a little about it.

In overall, I think this is a fair paper, but I am not well prepared for it. I should’t have focusing too much on calculations and neglect on the theory part, Esp Impairment 🙁 and Framework.

@angang2011 said:
There were few tricks: Q1 cash in transit and goods in transit, my balance sheet didn’t balance, Q2 The lease treatment, the loss for the year was ok, Q3 I didn’t calculate the dividend payment, but I’ve done the second part with good explanation, (I am not sure if it helps without the correct calculation of a cash flow), Q 4 in the part of question for 4 marks were not impairment. Q5 I completely forgot to answer, I had too much pressure before the exam, just went of my mind. I hope to score from remaining 90 pts.:(

Question 4 (b) 1st part my answer is $500,000 (no impairment) also.
Second part i let the impairment first allocate to plant (the $500) first, then to goodwill. The rest allocate to other assets except current assets. i manage to get whole number without decimals and hopefully is correct.

@jm84 said:
Question 4 (b) 1st part my answer is $500,000 (no impairment) also.
Second part i let the impairment first allocate to plant (the $500) first, then to goodwill. The rest allocate to other assets except current assets. i manage to get whole number without decimals and hopefully is correct.

4(b)(i)In CGU, Impairment first to plant 2500-500,so impairment 2000, Patent can recoverable 1000, then impairment of patent to 1000, and then Goodwill 1800 to zero, impairment 1800, then impairment to other except receivable and cash. This CGU impairment is quite easy.

It was an okay paper. Just generally harder than the other papers that I have attempted before. FRS 36 was a gift!

@johnnyjonjonol said:
did anyone else get negative goodwill for q1???

I don’t think it is a negative goodwill unless u did not include the deferred consideration.

It’s not negative goodwill it should be positive. but i also get negative because i didn’t use investment number for subsidiary in TB amount 24,000K. if u all used that number it may correct.

Q.1 – really pleased as did it in 45 mins, balance sheet balanced and even remembered unwinding of the discount.
Q.2 – not so much! See separate post
Q. 3 – disastrous! Couldn’t get cash flow statement to balance but hopefully scored a few marks. Decided to go on after part a and come back to b after Q.s 4 and 5 but at that point I decided to opt for finishing Q.2 instead. 14 marks thrown away as only wrote a sentence for part b of Q.3. I wasn’t even stuck on this, it just looked time consuming!!
Q.4 – quite straightforward although I now realise I forgot to discuss CGUs in part a! Part b I agree with comments above i.e. no impairment for the $500k asset and apportioning the CGU impairment 500 to plant, 200 to patent, eliminating goodwill and apportioning the rest pro rata (think it was 0.4 of property and remaining plant)
Q.5 – pleased with part a and came up with 3-4 advantages in part b so probably not worth 6 marks.

@polldoll said:
Q.1 – really pleased as did it in 45 mins, balance sheet balanced and even remembered unwinding of the discount.
Q.2 – not so much! See separate post
Q. 3 – disastrous! Couldn’t get cash flow statement to balance but hopefully scored a few marks. Decided to go on after part a and come back to b after Q.s 4 and 5 but at that point I decided to opt for finishing Q.2 instead. 14 marks thrown away as only wrote a sentence for part b of Q.3. I wasn’t even stuck on this, it just looked time consuming!!
Q.4 – quite straightforward although I now realise I forgot to discuss CGUs in part a! Part b I agree with comments above i.e. no impairment for the $500k asset and apportioning the CGU impairment 500 to plant, 200 to patent, eliminating goodwill and apportioning the rest pro rata (think it was 0.4 of property and remaining plant)
Q.5 – pleased with part a and came up with 3-4 advantages in part b so probably not worth 6 marks.

I also manage to get a balanced SOFP, but my worry is balanced doesn’t mean sure correct, Do you still remember what is your total assets amount?

I also manage to get a balanced SOFP, but my worry is balanced doesn’t mean sure correct, Do you still remember what is your total assets amount?

Sorry, no. Moved on and can only remember the traumas of the later questions!

made a huge mistake with the deferred consideration, mistakenly multiplied the discounting factor with 80,000 shares instead of 8,000, had 64,000 instead of 6,400. this will definitely mess up my goodwill.hope i get a 50marks from the other questions. 🙁