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Moston-Sep/Dec past papers

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Moston-Sep/Dec past papers

  • This topic has 4 replies, 4 voices, and was last updated 4 years ago by P2-D2.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • June 6, 2016 at 10:49 am #319791
    nightingale123
    Member
    • Topics: 12
    • Replies: 12
    • ☆

    Dear Mike,

    Could you please advice this note from past paper question?

    Revenue includes a $3 million sale made on 1 January 2015 of maturing goods which are not biological assets.
    The carrying amount of these goods at the date of sale was $2 million. Moston is still in possession of the goods(but they have not been included in the inventory count) and has an unexercised option to repurchase them atany time in the next three years. In three years’ time the goods are expected to be worth $5 million. The repurchase price will be the original selling price plus interest at 10% per annum from the date of sale to the date of repurchase.

    Why should we deduct ot from revenue?

    June 6, 2016 at 12:19 pm #319845
    nightingale123
    Member
    • Topics: 12
    • Replies: 12
    • ☆

    Also one more question from June 2014 Past Paper fromm the question Penketh.

    Non-controlling interest in total comprehensive income:
    Non-controlling interest in statement of profit or loss (above)
    Other comprehensive income ((3,000 – 2,000) x 40%)

    Could you please advise why he deducted from other comprehesive income 2000. It was above and I have added it

    June 6, 2016 at 4:25 pm #319893
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22703
    • ☆☆☆☆☆

    “Why should we deduct ot from revenue?”

    Because it’s not a sale! It’s a loan with the maturing goods given as security

    “Non-controlling interest in statement of profit or loss (above)
    Other comprehensive income ((3,000 – 2,000) x 40%)

    Could you please advise why he deducted from other comprehesive income 2000. It was above and I have added it”

    The land was revalued at date of acquisition by $2,000

    Then it gained a further $1,000 since acquisition

    In Total the land has increased in fair value by $3,000

    But $2,000 of that was as at date of acquisition

    So only ($3,000 – $2,000) is in the post acquisition period

    Does that explain it for you?

    August 27, 2018 at 4:34 pm #469659
    aarina
    Member
    • Topics: 71
    • Replies: 145
    • ☆☆☆

    Thanks mike however, can you please elaborate why 2m was deducted from COS? Thanks

    August 27, 2018 at 8:32 pm #469708
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6453
    • ☆☆☆☆☆

    Hi,

    If we remove the revenue then we also have to remove the associated cost of the goods as otherwise the profit on sale would not be correctly removed.

    Thanks

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