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Acca F7 Answers

Principles Pilot Daily news – Abilities module

Financial Reporting (International)

Time allowed Reading and planning: Publishing:

15 minutes a few hours

EVERY FIVE questions are compulsory and MUST be attempted.

Will not open this paper right up until instructed by the supervisor. During reading and planning period only the query paper might be annotated. You must NOT write within your answer guide until directed by the director. This problem paper should not be removed from the examination area.

The Affiliation of Chartered Certified Accountancy firm

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Conventional paper F7 (INT)

ALL FIVE questions happen to be compulsory and MUST be experimented with

1

On 1 Oct 2005 Pumice acquired this non-current investments: – many of these of the fairness share capital of Silverton at a cost of $13. 6 mil – fifty percent of Silverton's 10% mortgage notes by par – 1 . six million equity shares in Amok in a cost of $6. twenty-five each. The summarised draft balance sheets of the 3 companies at 31 Mar 2006 are:

Non-current assets House, plant and equipment Assets Current possessions Total resources Equity and liabilities Fairness Equity stocks of $1 each Retained earnings noncurrent liabilities 8% loan be aware 10% mortgage note Current liabilities Total equity and liabilities The next information is relevant: (i)

Pumice ilvertonAmok T $'000 $'000 $'000 20, 000 twenty six, 000 46, 000 15, 000 61, 000 eight, 500 nil 8, five-hundred 8, 1000 16, 500 16, 500 1, 500 18, 000 11, 500 29, 000

10, 500 37, 1000 47, 1000 4, 500 nil 15, 000 sixty one, 000

three or more, 000 8, 000 14, 000 zero 2, 1000 3, 500 16, five-hundred

4, 1000 20, 1000 24, 000 nil zero 5, 1000 29, 500

(ii)

(iii) (iv) (v)

The reasonable values of Silverton's assets were equal to their transporting amounts except for land and plant. Silverton's land a new fair worth of $400, 000 in excess of its having amount and plant a new fair worth of $1. 6 million in excess of the carrying sum. The plant a new remaining your life of four years (straight-line depreciation) at the day of acquisition. In the post acquisition period Pumice offered goods to Silverton in a price of $6 mil. These goods had expense Pumice $4 million. Half of these merchandise were nonetheless in the products on hand of Silverton at thirty-one March 2006. Silverton had a balance of $1. a few million due to Pumice for 31 Mar 2006 which usually agreed with Pumice's records. The net income after taxes for the year ended 23 March 2006 was $2 million intended for Silverton and $8 mil for Aberration. Assume income accrued consistently throughout the year. An impairment evaluation at 23 March 2006 concluded that consolidated goodwill was impaired simply by $400, 000 and the expenditure in Aberration was disadvantaged by one hundred dollar, 000. No dividends were paid in the past year by one of the companies.

Essential: (a) Go over how the assets purchased by Pumice on 1 August 2005 should be treated in the consolidated monetary statements. (5 marks) (b) Prepare the consolidated "balance sheet" for Pumice as for 31 03 2006. (20 marks) (25 marks)

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2

The following trial balance relates to Kala, a publicly shown company, for 31 Mar 2006: Area and properties at expense (note (i)) Plant – at expense (note (i)) Investment properties – valuation in 1 The spring 2005 (note (i)) Acquisitions Operating expenses Loan interest paid Leasing of rented plant (note (ii)) Payouts paid Products on hand at one particular April 2006 Trade receivables Revenue Profits from rental properties Equity stocks and shares of $1 each totally paid Retained earnings at 1 The spring 2005 8% (actual and effective) bank loan note (note (iii)) Built up depreciation in 1 The spring 2005 – buildings – plant Trade payables Deferred tax Traditional bank $'000 270, 000 one hundred and fifty six, 000 90, 000 78, 200 12-15, 500 a couple of, 000 twenty-two, 000 15, 000 thirty seven, 800 53, 200 $'000

278, 500 4, 500 150, 500 119, five-hundred 50, 000 60, 1000 26, 1000 33, 4 hundred 12, five-hundred 5, 500 739, seven hundred 739, 700

The following remarks are relevant: (i) The land and buildings had been purchased in 1 04 1990. The cost of...

19.08.2019

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