At 31 December 20X5 the following require inclusio...

The statements of financial position for Cindy and Payson as at 31 December 20X1 are presented below:AssetsCindyPaysonNon-current assets$$Property, plant and equipment270,000179,000investment300,000---Current assets Inventories95,00050,000Trade and other receivables110,00099,000Cash and cash equivalents8,00051,000Total Assets783,000379,000Equity and liabilities Equity Share capital80,00040,000Ruation surplus20,00010,000Retained earnings435,000209,000Liabilities Long-term loans200,00070,000Trade and other payables48,00050,000Total equity and liabilities783,000379,000 The following notes are relevant to the preparation of the consolidated financial statements:1) Cindy acquired 75% of the ordinary shares of Payson for $300,000 several years ago. At the acqu isition date, the retained earnings of Payson were $120,000 and ruation surplus was $10,000. The fair value of the non-controlling interest at the date of acquisition was $55,000.

Included within the financial assets of Zinet Co at 31 March 20X9 are the following two recently purchased investments in publically-traded equity shares:

Investment 1 – 10% of the issued share capital of Haruka Co. This shareholding was acquired as a long-term investment as Zinet Co wishes to participate as an active shareholder of Haruka Co.

Investment 2 – 10% of the issued share capital of Lukas Co. This shareholding was acquired for speculative purposes and Zinet Co expects to sell these shares in the near future.

Neither of these shareholdings gives Zinet Co significant influence over the investee companies.

Wherever possible, the directors of Zinet Co wish to avoid taking any fair value movements to profit or loss, so as to minimise volatility in reported earnings.

How should the fair value movements in these investments be reported in Zinet Co’s financial statements for the year ended 31 March 20X9?

A.In profit or loss for both investments

B.In other comprehensive income for both investments

C.In profit or loss for investment 1 and in other comprehensive income for investment 2

D.In other comprehensive income for investment 1 and in profit or loss for investment 2

The following scenario relates to questions 1–5.

Aphrodite Co has a year end of 31 December and operates a factory which makes computer chips for mobile phones. It purchased a machine on 1 July 20X3 for $80,000 which had a useful life of ten years and is depreciated on the straight-line basis, time apportioned in the years of acquisition and disposal. The machine was revalued to $81,000 on 1 July 20X4. There was no change to its useful life at that date.

A fire at the factory on 1 October 20X6 damaged the machine leaving it with a lower operating capacity. The accountant considers that Aphrodite Co will need to recognise an impairment loss in relation to this damage. The accountant has ascertained the following information at 1 October 20X6:

(1) The carrying amount of the machine is $60,750.

(2) An equivalent new machine would cost $90,000.

(3) The machine could be sold in its current condition for a gross amount of $45,000. Dismantling costs would amount to $2,000.

(4) In its current condition, the machine could operate for three more years which gives it a value in use figure of $38,685.

In accordance with IAS 16 Property, Plant and Equipment, what is the depreciation charged to Aphrodite Co’s profit or loss in respect of the machine for the year ended 31 December 20X4?

A.$9,000

B.$8,000

C.$8,263

D.$8,500

What is the total impairment loss associated with Aphrodite Co’s machine at 1 October 20X6?A.$nil

B.$17,750

C.$22,065

D.$15,750

The accountant has decided that it is too difficult to reliably attribute cash flows to this one machine and that it would be more accurate to calculate the impairment on the basis of the factory as a cash-generating unit.

In accordance with IAS 36, which of the following is TRUE regarding cash generating units?

A.A cash-generating unit to which goodwill has been allocated should be tested for impairment every five years

B.A cash-generating unit must be a subsidiary of the parent

C.There is no need to consistently identify cash-generating units based on the same types of asset from period to period

D.A cash-generating unit is the smallest identifiable group of assets for which independent cash flows can be identified

On 1 July 20X7, it is discovered that the damage to the machine is worse than originally thought. The machine is now considered to be worthless and the recoverable amount of the factory as a cash-generating unit is estimated to be $950,000.

At 1 July 20X7, the cash-generating unit comprises the following assets:

In accordance with IAS 36, what will be the carrying amount of Aphrodite Co’s plant and equipment when the impairment loss has been allocated to the cash-generating unit?

A.$262,500

B.$300,000

C.$237,288

D.$280,838

IAS 36 Impairment of Assets contains a number of examples of internal and external events which may indicate the impairment of an asset.

In accordance with IAS 36, which of the following would definitely NOT be an indicator of the potential impairment of an asset (or group of assets)?

A.An unexpected fall in the market value of one or more assets

B.Adverse changes in the economic performance of one or more assets

C.A significant change in the technological environment in which an asset is employed making its software effectively obsolete

D.The carrying amount of an entity’s net assets being below the entity’s market capitalisation

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The following scenario relates to questions 6–10.

On 1 January 20X5, Blocks Co entered into new lease agreements as follows:

Agreement one This finance lease relates to a new piece of machinery. The fair value of the machine is $220,000. The agreement requires Blocks Co to pay a deposit of $20,000 on 1 January 20X5 followed by five equal annual instalments of $55,000, starting on 31 December 20X5. The implicit rate of interest is 11·65%.

Agreement two This three-year operating lease relates to a fleet of vans. The fair value of the vans is $120,000 and they have an estimated useful life of five years. The agreement requires Blocks Co to make no payment in year one and $48,000 in years two and three.

Agreement three This sale and leaseback relates to a cutting machine purchased by Blocks Co on 1 January 20X4 for $300,000. The carrying amount of the machine as at 31 December 20X4 was $250,000. On 1 January 20X5, it was sold to Cogs Co for $370,000 and Blocks Co will lease the machine back for five years, the remainder of its useful life, at $80,000 per annum.

According to IAS 17 Leases, which of the following is generally considered to be a characteristic of an operating, rather than a finance, lease?

A.Ownership of the assets is passed to the lessee by the end of the lease term

B.The lessor is responsible for the general maintenance and repair of the assets

C.The present value of the lease payments is approximately equal to the fair value of the asset

D.The lease term is for a major part of the useful life of the asset

For agreement one, what is the finance cost charged to profit or loss for the year ended 31 December 20X6?

A.$23,300

B.$12,451

C.$19,607

D.$16,891

The following calculations have been prepared for agreement one: How will the finance lease obligation be shown in the statement of financial position as at 31 December 20X7?

A.$44,120 as a non-current liability and $49,271 as a current liability

B.$49,271 as a non-current liability and $44,120 as a current liability

C.$93,391 as a non-current liability

D.$93,391 as a current liability

For agreement three, what profit should be recognised for the year ended 31 December 20X5 as a result of the sale and leaseback?A.$24,000

B.$120,000

C.$70,000

D.$20,000

For agreement two, what would be the correct statement of profit or loss entries for the year ended 31 December 20X5?A.Depreciation of $24,000 and no lease rental expense

B.No depreciation and lease rental expense of $32,000

C.Depreciation of $24,000 and lease rental expense of $32,000

D.No depreciation and lease rental expense of $48,000

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The following trial balance relates to Xtol at 31 March 2014:

The following notes are relevant:

(i) Revenue includes an amount of $20 million for cash sales made through Xtol’s retail outlets during the year on behalf of Francais. Xtol, acting as agent, is entitled to a commission of 10% of the selling price of these goods. By 31 March 2014, Xtol had remitted to Francais $15 million (of the $20 million sales) and recorded this amount in cost of sales.

(ii) Plant and equipment is depreciated at 12?% per annum on the reducing balance basis. All amortisation/depreciation of non-current assets is charged to cost of sales.

(iii) On 1 August 2013, Xtol made a fully subscribed rights issue of equity share capital based on two new shares at 60 cents each for every five shares held. The market price of Xtol’s shares before the issue was $1·02 each. The issue has been fully recorded in the trial balance figures.

(iv) On 1 April 2013, Xtol issued a 5% $50 million convertible loan note at par. Interest is payable annually in arrears on 31 March each year. The loan note is redeemable at par or convertible into equity shares at the option of the loan note holders on 31 March 2016.

The interest on an equivalent loan note without the conversion rights would be 8% per annum. The present values of $1 receivable at the end of each year, based on discount rates of 5% and 8%, are:

(v) An equity dividend of 4 cents per share was paid on 30 May 2013 and, after the rights issue, a further dividend of 2 cents per share was paid on 30 November 2013.

(vi) The balance on current tax represents the under/over provision of the tax liability for the year ended 31 March 2013. A provision of $28 million is required for current tax for the year ended 31 March 2014 and at this date the deferred tax liability was assessed at $8·3 million.

Required:

(a) Prepare the statement of profit or loss for Xtol for the year ended 31 March 2014.

(b) Prepare the statement of changes in equity for Xtol for the year ended 31 March 2014.

(c) Prepare the statement of financial position for Xtol as at 31 March 2014.

(d) Calculate the basic earnings per share (EPS) for Xtol for the year ended 31 March 2014.

Note: Answers and workings (for parts (a) to (c)) should be presented to the nearest $1,000; notes to the financial statements are not required.

The following mark allocation is provided as guidance for this question:

(a) 8 marks

(b) 6 marks

(c) 8 marks

(d) 3 marks

Patula Co acquired 80% of Sanka Co on 1 October 20X5. At this date, some of Sanka Co’s inventory had a carrying amount of $600,000 but a fair value of $800,000. By 31 December 20X5, 70% of this inventory had been sold by Sanka Co.

The individual statements of financial position at 31 December 20X5 for both companies show the following:

What will be the total inventories figure in the consolidated statement of financial position of Patula Co as at 31 December 20X5?

A.$5,250,000

B.$5,330,000

C.$5,130,000

D.$5,238,000

The following are excerpts from Bao, Inc.financial statements related to its fixed assets activity for the fiscal year ended June 30, 2004 ($million):

Assuming the firm uses straight line depreciation, the average age and the average depreciable life of Bao’s fixed assets are closest to:

A.7 years for average age and 20 years for average depreciable life.

B.6 years for average age and 14 years for average depreciable life.

C.6 years for average age and 20 years for average depreciable life.

At 30 September 20X2 the trial balance of Cavern includes the following balances:

Cavern has accounted for a fully-subscribed rights issue of equity shares made on 1 April 20X2 of one new share for every four in issue at 42 cents each. This was the only share issue made during the year.

What were the balances on the share capital and share premium accounts at 30 September 20X1().

______ no conclusive evidence exists, many experts believe that the wheel was invented only once and then diffused to the rest of the world.

A．Even

B．But

C．Although

D．So

Look at the four squares,,and , which indicate where the following sentence could be added to the passage. Where would the sentence best fit?

One of these structures is a kind of central processing unit that connects memory with physical functions.

The limbic system of the brain integrates memory, emotion, and behavior. The system is composed of a group of related nervous system structures that are the functional center of emotions such as anger, fear, pleasure, and sadness. AThe components of the limbic system are linked to the cerebral cortex, the part of the brain involved in complex learning, reasoning, and personality.B The cerebral cortex makes decisions about the emotional content of these unique human qualities after "consulting" the limbic system and other brain centers in processing and retrieving memories. CIt may, in turn, use memories to modify behavior.D

A．Square Ａ.

B．Square Ｂ.

C．Square Ｃ.

D．Square Ｄ.