ACCA F7 Practice and Revision kit edition for exams up to ...
ACCA F7 Practice and Revision kit ? edition for exams up to June 2018 Errata
Question 24 ? The question should state: An aircraft requires a planned overhaul every three years at a cost of $5,000.
Question 91 ? The correct answer should be B ? Recognising revenue when a performance obligation is satisfied.
Qn 96 ? There are TWO correct answers here. Work invoiced to date as a % of total contract price is also correct.
Qn 102 ? Option B should be changed to: `The price paid to acquire the asset'. This will be the correct answer to the question.
Qn 142 ? there is an error in the part (a). The answer should be:
(a) Goodwill on acquisition of Sentinel (1/10/X0)
Consideration (((160,000 ? 75%) ? 2/3) ? $4) Fair value of non-controlling interest
Fair value of net assets: Shares Other equity reserve (2,200 ? (400 6/12)*) Retained earnings (158,000 + (66,000 x 6/12)
Goodwill
$'000
160,000 2,000
191,000
$'000 320,000 100,000 420,000
(353,000) 67,000
*Note. Of the $400,000 loss on the investment in equity instruments, half (6/12) is pre-acquisition and goes to the goodwill calculation. The remainder is post-acquisition and goes to the consolidated statement of profit or loss.
Qn 146 ? the correct answer is D: No effect on group inventory. The transaction will be posted as DR Share of profit of associate/CR Investment in associate.
Qn 148 ? the date of the dividend payment should be 1 September 20X3.
Qn 171 ? the payment in advance of $700,000 should be added to the right-of-use asset rather than deducted from the liability. The correct answer is therefore D and the working is:
Initial liability Interest 6% Balance 31.12.X6 Payment
Interest 6% Balance 31.12.X7
$'000 3,300
198 3,498 (700) 2,798
168 2,966
Current Non-current
700 2,266 2,966
Qn 175 ? the correct answer is C. The working is:
Initial liability Interest 10% Payment Balance 30 September 20X4 Interest 10%
$'000 25,000 2,500 (6,000) 21,500 2,150
Qn 179 ? the answer is $124,000. The working is:
Lease interest (340,000 x 10%) Depreciation ((340,000 + 90,000)/5) Short-term lease (18,000 x 2/9)
$'000 34,000 86,000
4,000 124,000
Qn 180 ? the deposit of $120,000 should be added to the right-of-use asset rather than deducted
from the liability. The answer is $36,384. The working is:
$'000
Initial liability
360,000
Interest 12%
43,200
Payment
(100,000)
Bal 31.12.X6
303,200
Interest 12%
36,384
Qn 181 The initial measurement of the lease liability in the question should be $250,000, not $350,000.
Qn 182 ? the answer is correct. The working should show:
$'000
Lease liability
250
Initial payment
100
Initial direct costs
20
Dismantling costs
15
Lease incentives
(7)
378
Qn 184 ? the answer is correct. The working should show:
$'000
Opening liability 1.4.X7
250,000
Interest to 30.9.X7 (250,000 x 10% x 6/12)
12,500
Balance 30.9.X7
262,500
Interest to 1.4.X8 (250,000 x 10% x 6/12)
12,500
1.4.X8 payment
(100,000)
Balance due 30.9.X8
175,000
Question 253 ? the question should refer to `profit before interest and tax' rather than `net profit'
Question 256 ? the calculation of ROE is incorrect as it has been based on profit before tax, rather than profit after tax. The correct ratios are: 20X1: 3,000/9,500 = 31.6% 20X2: 2,500/7,250 = 34.5%
Qn 279 ? the correct answer is $10,000 received, calculated as:
B/f current B/f deferred Charge for the year Received (balance) C/f (current + deferred)
$ 30,000 160,000 10,000 200,000
Mixed MCQ bank:
Q2 - The question and answer should refer to PBIT margin, not net profit margin.
Q15 ? Option D should state; legal action commenced by a supplier in respect of goods delivered after the year end.
Mixed OTQ bank:
Q2 ? the correct answer is: Continue to recognise the receivables and treat the $1.8 million received as a loan.
Q6 ? the question should be: What is the total consideration transferred for the investment in Plank which will appear in the goodwill calculation at 31 December 20X4?
Q8 ? the question should be: What is the total amount which will be charged to profit or loss in respect of this closure?
Q14 ? the correct answer is $195,000 (30,000 x $6.50)
ACCA Study text ? edition for exams up to June 2018
Practice question bank
Question 12 ? Panther
The calculation of NCI (W2) does not take account of the cancellation of interest on the intragroup
loan. The working should be:
PFY
TCI
$'000 $'000
Profit/TCI for the year (610 x 6/12) / (790 x 6/12)
305
395
Less PUP (W3)
(10)
(10)
Add back intragroup interest
20
20
Additional depreciation on fair value adjustment
(5)
(5)
310
400
NCI share (40%)
124
160
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