(c) Wader is reviewing the accounting treatment of its buildings. The company uses the ‘revaluation model’ for itsbuildings. The buildings had originally cost $10 million on 1 June 2005 and had a useful economic life of20 years. They are being depreciated on a straight line basis to a nil residual value. The buildings were revalueddownwards on 31 May 2006 to $8 million which was the buildings’ recoverable amount. At 31 May 2007 thevalue of the buildings had risen to $11 million which is to be included in the financial statements. The companyis unsure how to treat the above events. (7 marks)Required:Discuss the accounting treatments of the above items in the financial statements for the year ended 31 May2007.Note: a discount rate of 5% should be used where necessary. Candidates should show suitable calculations wherenecessary.

考题 For the year just ended，N company had an earnings of$2 per share and paid a dividend of $1．2 0n its Stock．The growth rate in net income and dividend are both expected to be a constant 7 percent per year,indefinitely．N company has a Beta of 0．8，the risk-free interest rate is 6 percent，and the market risk premium is 8 percent．P Company is very similar to N company in growth rate，risk and dividend payout rati0．It had 20 million shares outstanding and an earnings of$36 million for the year just ended．The earnings will increase to$38．5 million the next year．Requirement：A．Calculate the expected rate of return on N company’S equity．B．Calculate N Company’S current price—eaming ratio and prospective price-earning rati0．C．Using N company’S current price-earning rati0，value P company’S stock price．D．Using N company’S prospective price-earning rati0，value P company’S stock price．

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考题 12 At 1 July 2004 a company had prepaid insurance of $8,200. On 1 January 2005 the company paid $38,000 forinsurance for the year to 30 September 2005.What figures should appear for insurance in the company’s financial statements for the year ended 30 June2005?Income statement Balance sheetA $27,200 Prepayment $19,000B $39,300 Prepayment $9,500C $36,700 Prepayment $9,500D $55,700 Prepayment $9,500

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考题 Additionally the directors wish to know how the provision for deferred taxation would be calculated in the followingsituations under IAS12 ‘Income Taxes’:(i) On 1 November 2003, the company had granted ten million share options worth $40 million subject to a twoyear vesting period. Local tax law allows a tax deduction at the exercise date of the intrinsic value of the options.The intrinsic value of the ten million share options at 31 October 2004 was $16 million and at 31 October 2005was $46 million. The increase in the share price in the year to 31 October 2005 could not be foreseen at31 October 2004. The options were exercised at 31 October 2005. The directors are unsure how to accountfor deferred taxation on this transaction for the years ended 31 October 2004 and 31 October 2005.(ii) Panel is leasing plant under a finance lease over a five year period. The asset was recorded at the present valueof the minimum lease payments of $12 million at the inception of the lease which was 1 November 2004. Theasset is depreciated on a straight line basis over the five years and has no residual value. The annual leasepayments are $3 million payable in arrears on 31 October and the effective interest rate is 8% per annum. Thedirectors have not leased an asset under a finance lease before and are unsure as to its treatment for deferredtaxation. The company can claim a tax deduction for the annual rental payment as the finance lease does notqualify for tax relief.(iii) A wholly owned overseas subsidiary, Pins, a limited liability company, sold goods costing $7 million to Panel on1 September 2005, and these goods had not been sold by Panel before the year end. Panel had paid $9 millionfor these goods. The directors do not understand how this transaction should be dealt with in the financialstatements of the subsidiary and the group for taxation purposes. Pins pays tax locally at 30%.(iv) Nails, a limited liability company, is a wholly owned subsidiary of Panel, and is a cash generating unit in its ownright. The value of the property, plant and equipment of Nails at 31 October 2005 was $6 million and purchasedgoodwill was $1 million before any impairment loss. The company had no other assets or liabilities. Animpairment loss of $1·8 million had occurred at 31 October 2005. The tax base of the property, plant andequipment of Nails was $4 million as at 31 October 2005. The directors wish to know how the impairment losswill affect the deferred tax provision for the year. Impairment losses are not an allowable expense for taxationpurposes.Assume a tax rate of 30%.Required:(b) Discuss, with suitable computations, how the situations (i) to (iv) above will impact on the accounting fordeferred tax under IAS12 ‘Income Taxes’ in the group financial statements of Panel. (16 marks)(The situations in (i) to (iv) above carry equal marks)

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考题 4 Ryder, a public limited company, is reviewing certain events which have occurred since its year end of 31 October2005. The financial statements were authorised on 12 December 2005. The following events are relevant to thefinancial statements for the year ended 31 October 2005:(i) Ryder has a good record of ordinary dividend payments and has adopted a recent strategy of increasing itsdividend per share annually. For the last three years the dividend per share has increased by 5% per annum.On 20 November 2005, the board of directors proposed a dividend of 10c per share for the year ended31 October 2005. The shareholders are expected to approve it at a meeting on 10 January 2006, and adividend amount of $20 million will be paid on 20 February 2006 having been provided for in the financialstatements at 31 October 2005. The directors feel that a provision should be made because a ‘valid expectation’has been created through the company’s dividend record. (3 marks)(ii) Ryder disposed of a wholly owned subsidiary, Krup, a public limited company, on 10 December 2005 and madea loss of $9 million on the transaction in the group financial statements. As at 31 October 2005, Ryder had nointention of selling the subsidiary which was material to the group. The directors of Ryder have stated that therewere no significant events which have occurred since 31 October 2005 which could have resulted in a reductionin the value of Krup. The carrying value of the net assets and purchased goodwill of Krup at 31 October 2005were $20 million and $12 million respectively. Krup had made a loss of $2 million in the period 1 November2005 to 10 December 2005. (5 marks)(iii) Ryder acquired a wholly owned subsidiary, Metalic, a public limited company, on 21 January 2004. Theconsideration payable in respect of the acquisition of Metalic was 2 million ordinary shares of $1 of Ryder plusa further 300,000 ordinary shares if the profit of Metalic exceeded $6 million for the year ended 31 October2005. The profit for the year of Metalic was $7 million and the ordinary shares were issued on 12 November2005. The annual profits of Metalic had averaged $7 million over the last few years and, therefore, Ryder hadincluded an estimate of the contingent consideration in the cost of the acquisition at 21 January 2004. The fairvalue used for the ordinary shares of Ryder at this date including the contingent consideration was $10 per share.The fair value of the ordinary shares on 12 November 2005 was $11 per share. Ryder also made a one for fourbonus issue on 13 November 2005 which was applicable to the contingent shares issued. The directors areunsure of the impact of the above on earnings per share and the accounting for the acquisition. (7 marks)(iv) The company acquired a property on 1 November 2004 which it intended to sell. The property was obtainedas a result of a default on a loan agreement by a third party and was valued at $20 million on that date foraccounting purposes which exactly offset the defaulted loan. The property is in a state of disrepair and Ryderintends to complete the repairs before it sells the property. The repairs were completed on 30 November 2005.The property was sold after costs for $27 million on 9 December 2005. The property was classified as ‘held forsale’ at the year end under IFRS5 ‘Non-current Assets Held for Sale and Discontinued Operations’ but shown atthe net sale proceeds of $27 million. Property is depreciated at 5% per annum on the straight-line basis and nodepreciation has been charged in the year. (5 marks)(v) The company granted share appreciation rights (SARs) to its employees on 1 November 2003 based on tenmillion shares. The SARs provide employees at the date the rights are exercised with the right to receive cashequal to the appreciation in the company’s share price since the grant date. The rights vested on 31 October2005 and payment was made on schedule on 1 December 2005. The fair value of the SARs per share at31 October 2004 was $6, at 31 October 2005 was $8 and at 1 December 2005 was $9. The company hasrecognised a liability for the SARs as at 31 October 2004 based upon IFRS2 ‘Share-based Payment’ but theliability was stated at the same amount at 31 October 2005. (5 marks)Required:Discuss the accounting treatment of the above events in the financial statements of the Ryder Group for the yearended 31 October 2005, taking into account the implications of events occurring after the balance sheet date.(The mark allocations are set out after each paragraph above.)(25 marks)

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考题 2 Misson, a public limited company, has carried out transactions denominated in foreign currency during the financialyear ended 31 October 2006 and has conducted foreign operations through a foreign entity. Its functional andpresentation currency is the dollar. A summary of the foreign currency activities is set out below:(a) Misson has a 100% owned foreign subsidiary, Chong, which was formed on 1 November 2004 with a sharecapital of 100 million euros which has been taken as the cost of the investment. The total shareholders’ equityof the subsidiary as at 31 October 2005 and 31 October 2006 was 140 million euros and 160 million eurosrespectively. Chong has not paid any dividends to Misson and has no other reserves than retained earnings in itsfinancial statements. The subsidiary was sold on 31 October 2006 for 195 million euros.Misson would like to know how to treat the sale of the subsidiary in the parent and group accounts for the yearended 31 October 2006. (8 marks)Required:Discuss the accounting treatment of the above transactions in accordance with the advice required by thedirectors.(Candidates should show detailed workings as well as a discussion of the accounting treatment used.)

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考题 (b) Misson has purchased goods from a foreign supplier for 8 million euros on 31 July 2006. At 31 October 2006,the trade payable was still outstanding and the goods were still held by Misson. Similarly Misson has sold goodsto a foreign customer for 4 million euros on 31 July 2006 and it received payment for the goods in euros on31 October 2006. Additionally Misson had purchased an investment property on 1 November 2005 for28 million euros. At 31 October 2006, the investment property had a fair value of 24 million euros. The companyuses the fair value model in accounting for investment properties.Misson would like advice on how to treat these transactions in the financial statements for the year ended 31October 2006. (7 marks)Required:Discuss the accounting treatment of the above transactions in accordance with the advice required by thedirectors.(Candidates should show detailed workings as well as a discussion of the accounting treatment used.)

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考题 3 Seejoy is a famous football club but has significant cash flow problems. The directors and shareholders wish to takesteps to improve the club’s financial position. The following proposals had been drafted in an attempt to improve thecash flow of the club. However, the directors need advice upon their implications.(a) Sale and leaseback of football stadium (excluding the land element)The football stadium is currently accounted for using the cost model in IAS16, ‘Property, Plant, and Equipment’.The carrying value of the stadium will be $12 million at 31 December 2006. The stadium will have a remaininglife of 20 years at 31 December 2006, and the club uses straight line depreciation. It is proposed to sell thestadium to a third party institution on 1 January 2007 and lease it back under a 20 year finance lease. The saleprice and fair value are $15 million which is the present value of the minimum lease payments. The agreementtransfers the title of the stadium back to the football club at the end of the lease at nil cost. The rental is$1·2 million per annum in advance commencing on 1 January 2007. The directors do not wish to treat thistransaction as the raising of a secured loan. The implicit interest rate on the finance in the lease is 5·6%.(9 marks)Required:Discuss how the above proposals would be dealt with in the financial statements of Seejoy for the year ending31 December 2007, setting out their accounting treatment and appropriateness in helping the football club’scash flow problems.(Candidates do not need knowledge of the football finance sector to answer this question.)

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考题 (ii) The property of the former administrative centre of Tyre is owned by the company. Tyre had decided in the yearthat the property was surplus to requirements and demolished the building on 10 June 2006. After demolition,the company will have to carry out remedial environmental work, which is a legal requirement resulting from thedemolition. It was intended that the land would be sold after the remedial work had been carried out. However,land prices are currently increasing in value and, therefore, the company has decided that it will not sell the landimmediately. Tyres uses the ‘cost model’ in IAS16 ‘Property, plant and equipment’ and has owned the propertyfor many years. (7 marks)Required:Advise the directors of Tyre on how to treat the above items in the financial statements for the year ended31 May 2006.(The mark allocation is shown against each of the above items)

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考题 3 (a) Leigh, a public limited company, purchased the whole of the share capital of Hash, a limited company, on 1 June2006. The whole of the share capital of Hash was formerly owned by the five directors of Hash and under theterms of the purchase agreement, the five directors were to receive a total of three million ordinary shares of $1of Leigh on 1 June 2006 (market value $6 million) and a further 5,000 shares per director on 31 May 2007,if they were still employed by Leigh on that date. All of the directors were still employed by Leigh at 31 May2007.Leigh granted and issued fully paid shares to its own employees on 31 May 2007. Normally share options issuedto employees would vest over a three year period, but these shares were given as a bonus because of thecompany’s exceptional performance over the period. The shares in Leigh had a market value of $3 million(one million ordinary shares of $1 at $3 per share) on 31 May 2007 and an average fair value of$2·5 million (one million ordinary shares of $1 at $2·50 per share) for the year ended 31 May 2007. It isexpected that Leigh’s share price will rise to $6 per share over the next three years. (10 marks)Required:Discuss with suitable computations how the above share based transactions should be accounted for in thefinancial statements of Leigh for the year ended 31 May 2007.

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考题 (b) Router has a number of film studios and office buildings. The office buildings are in prestigious areas whereasthe film studios are located in ‘out of town’ locations. The management of Router wish to apply the ‘revaluationmodel’ to the office buildings and the ‘cost model’ to the film studios in the year ended 31 May 2007. At presentboth types of buildings are valued using the ‘revaluation model’. One of the film studios has been converted to atheme park. In this case only, the land and buildings on the park are leased on a single lease from a third party.The lease term was 30 years in 1990. The lease of the land and buildings was classified as a finance lease eventhough the financial statements purport to comply with IAS 17 ‘Leases’.The terms of the lease were changed on 31 May 2007. Router is now going to terminate the lease early in 2015in exchange for a payment of $10 million on 31 May 2007 and a reduction in the monthly lease payments.Router intends to move from the site in 2015. The revised lease terms have not resulted in a change ofclassification of the lease in the financial statements of Router. (10 marks)Required:Discuss how the above items should be dealt with in the group financial statements of Router for the year ended31 May 2007.

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考题 (b) During the inventory count on 31 December, some goods which had cost $80,000 were found to be damaged.In February 2005 the damaged goods were sold for $85,000 by an agent who received a 10% commission outof the sale proceeds. (2 marks)Required:Advise the directors on the correct treatment of these matters, stating the relevant accounting standard whichjustifies your answer in each case.NOTE: The mark allocation is shown against each of the three matters.

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考题 The following information is relevant for questions 9 and 10A company’s draft financial statements for 2005 showed a profit of $630,000. However, the trial balance did not agree,and a suspense account appeared in the company’s draft balance sheet.Subsequent checking revealed the following errors:(1) The cost of an item of plant $48,000 had been entered in the cash book and in the plant account as $4,800.Depreciation at the rate of 10% per year ($480) had been charged.(2) Bank charges of $440 appeared in the bank statement in December 2005 but had not been entered in thecompany’s records.(3) One of the directors of the company paid $800 due to a supplier in the company’s payables ledger by a personalcheque. The bookkeeper recorded a debit in the supplier’s ledger account but did not complete the double entryfor the transaction. (The company does not maintain a payables ledger control account).(4) The payments side of the cash book had been understated by $10,000.9 Which of the above items would require an entry to the suspense account in correcting them?A All four itemsB 3 and 4 onlyC 2 and 3 onlyD 1, 2 and 4 only

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考题 (b) Historically, all owned premises have been measured at cost depreciated over 10 to 50 years. The managementboard has decided to revalue these premises for the year ended 30 September 2005. At the balance sheet datetwo properties had been revalued by a total of $1·7 million. Another 15 properties have since been revalued by$5·4 million and there remain a further three properties which are expected to be revalued during 2006. Arevaluation surplus of $7·1 million has been credited to equity. (7 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit working papers and financial statements of Albreda Co for the year ended30 September 2005.NOTE: The mark allocation is shown against each of the three issues.

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考题 3 You are the manager responsible for the audit of Volcan, a long-established limited liability company. Volcan operatesa national supermarket chain of 23 stores, five of which are in the capital city, Urvina. All the stores are managed inthe same way with purchases being made through Volcan’s central buying department and product pricing, marketing,advertising and human resources policies being decided centrally. The draft financial statements for the year ended31 March 2005 show revenue of $303 million (2004 – $282 million), profit before taxation of $9·5 million (2004– $7·3 million) and total assets of $178 million (2004 – $173 million).The following issues arising during the final audit have been noted on a schedule of points for your attention:(a) On 1 May 2005, Volcan announced its intention to downsize one of the stores in Urvina from a supermarket toa ‘City Metro’ in response to a significant decline in the demand for supermarket-style. shopping in the capital.The store will be closed throughout June, re-opening on 1 July 2005. Goodwill of $5·5 million was recognisedthree years ago when this store, together with two others, was bought from a national competitor. It is Volcan’spolicy to write off goodwill over five years. (7 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit working papers and financial statements of Volcan for the year ended31 March 2005.NOTE: The mark allocation is shown against each of the three issues.

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考题 (b) A sale of industrial equipment to Deakin Co in May 2005 resulted in a loss on disposal of $0·3 million that hasbeen separately disclosed on the face of the income statement. The equipment cost $1·2 million when it waspurchased in April 1996 and was being depreciated on a straight-line basis over 20 years. (6 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit working papers and financial statements of Keffler Co for the year ended31 March 2006.NOTE: The mark allocation is shown against each of the three issues.

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考题 (b) You are the audit manager of Johnston Co, a private company. The draft consolidated financial statements forthe year ended 31 March 2006 show profit before taxation of $10·5 million (2005 – $9·4 million) and totalassets of $55·2 million (2005 – $50·7 million).Your firm was appointed auditor of Tiltman Co when Johnston Co acquired all the shares of Tiltman Co in March2006. Tiltman’s draft financial statements for the year ended 31 March 2006 show profit before taxation of$0·7 million (2005 – $1·7 million) and total assets of $16·1 million (2005 – $16·6 million). The auditor’sreport on the financial statements for the year ended 31 March 2005 was unmodified.You are currently reviewing two matters that have been left for your attention on the audit working paper files forthe year ended 31 March 2006:(i) In December 2004 Tiltman installed a new computer system that properly quantified an overvaluation ofinventory amounting to $2·7 million. This is being written off over three years.(ii) In May 2006, Tiltman’s head office was relocated to Johnston’s premises as part of a restructuring.Provisions for the resulting redundancies and non-cancellable lease payments amounting to $2·3 millionhave been made in the financial statements of Tiltman for the year ended 31 March 2006.Required:Identify and comment on the implications of these two matters for your auditor’s reports on the financialstatements of Johnston Co and Tiltman Co for the year ended 31 March 2006. (10 marks)

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考题 3 You are the manager responsible for the audit of Seymour Co. The company offers information, proprietary foods andmedical innovations designed to improve the quality of life. (Proprietary foods are marketed under and protected byregistered names.) The draft consolidated financial statements for the year ended 30 September 2006 show revenueof $74·4 million (2005 – $69·2 million), profit before taxation of $13·2 million (2005 – $15·8 million) and totalassets of $53·3 million (2005 – $40·5 million).The following issues arising during the final audit have been noted on a schedule of points for your attention:(a) In 2001, Seymour had been awarded a 20-year patent on a new drug, Tournose, that was also approved forfood use. The drug had been developed at a cost of $4 million which is being amortised over the life of thepatent. The patent cost $11,600. In September 2006 a competitor announced the successful completion ofpreliminary trials on an alternative drug with the same beneficial properties as Tournose. The alternative drug isexpected to be readily available in two years time. (7 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit working papers and financial statements of Seymour Co for the year ended30 September 2006.NOTE: The mark allocation is shown against each of the three issues.

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考题 (b) You are the audit manager of Petrie Co, a private company, that retails kitchen utensils. The draft financialstatements for the year ended 31 March 2007 show revenue $42·2 million (2006 – $41·8 million), profit beforetaxation of $1·8 million (2006 – $2·2 million) and total assets of $30·7 million (2006 – $23·4 million).You are currently reviewing two matters that have been left for your attention on Petrie’s audit working paper filefor the year ended 31 March 2007:(i) Petrie’s management board decided to revalue properties for the year ended 31 March 2007 that hadpreviously all been measured at depreciated cost. At the balance sheet date three properties had beenrevalued by a total of $1·7 million. Another nine properties have since been revalued by $5·4 million. Theremaining three properties are expected to be revalued later in 2007. (5 marks)Required:Identify and comment on the implications of these two matters for your auditor’s report on the financialstatements of Petrie Co for the year ended 31 March 2007.NOTE: The mark allocation is shown against each of the matters above.

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考题 (d) Wader has decided to close one of its overseas branches. A board meeting was held on 30 April 2007 when adetailed formal plan was presented to the board. The plan was formalised and accepted at that meeting. Letterswere sent out to customers, suppliers and workers on 15 May 2007 and meetings were held prior to the yearend to determine the issues involved in the closure. The plan is to be implemented in June 2007. The companywish to provide $8 million for the restructuring but are unsure as to whether this is permissible. Additionally therewas an issue raised at one of the meetings. The operations of the branch are to be moved to another countryfrom June 2007 but the operating lease on the present buildings of the branch is non-cancellable and runs foranother two years, until 31 May 2009. The annual rent of the buildings is $150,000 payable in arrears on31 May and the lessor has offered to take a single payment of $270,000 on 31 May 2008 to settle theoutstanding amount owing and terminate the lease on that date. Wader has additionally obtained permission tosublet the building at a rental of $100,000 per year, payable in advance on 1 June. The company needs adviceon how to treat the above under IAS37 ‘Provisions, Contingent Liabilities and Contingent Assets’. (7 marks)Required:Discuss the accounting treatments of the above items in the financial statements for the year ended 31 May2007.Note: a discount rate of 5% should be used where necessary. Candidates should show suitable calculations wherenecessary.

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考题 This city is famous ____ its beautiful buildings. A.onB.atC.forD.with

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考题 On 1 April 2009 Pandar purchased 80% of the equity shares in Salva. The acquisition was through a share exchange of three shares in Pandar for every five shares in Salva. The market prices of Pandar’s and Salva’s shares at 1 April2009 were $6 per share and $3.20 respectively.On the same date Pandar acquired 40% of the equity shares in Ambra paying $2 per share.The summarised income statements for the three companies for the year ended 30 September 2009 are:The following information is relevant:(i) The fair values of the net assets of Salva at the date of acquisition were equal to their carrying amounts with the exception of an item of plant which had a carrying amount of $12 million and a fair value of $17 million. This plant had a remaining life of five years (straight-line depreciation) at the date of acquisition of Salva. All depreciation is charged to cost of sales.In addition Salva owns the registration of a popular internet domain name. The registration, which had anegligible cost, has a five year remaining life (at the date of acquisition); however, it is renewable indefinitely at a nominal cost. At the date of acquisition the domain name was valued by a specialist company at $20 million.The fair values of the plant and the domain name have not been reflected in Salva’s financial statements.No fair value adjustments were required on the acquisition of the investment in Ambra.(ii) Immediately after its acquisition of Salva, Pandar invested $50 million in an 8% loan note from Salva. All interest accruing to 30 September 2009 had been accounted for by both companies. Salva also has other loans in issue at 30 September 2009.(iii) Pandar has credited the whole of the dividend it received from Salva to investment income.(iv) After the acquisition, Pandar sold goods to Salva for $15 million on which Pandar made a gross profit of 20%. Salva had one third of these goods still in its inventory at 30 September 2009. There are no intra-group current account balances at 30 September 2009.(v) The non-controlling interest in Salva is to be valued at its (full) fair value at the date of acquisition. For thispurpose Salva’s share price at that date can be taken to be indicative of the fair value of the shareholding of the non-controlling interest.(vi) The goodwill of Salva has not suffered any impairment; however, due to its losses, the value of Pandar’sinvestment in Ambra has been impaired by $3 million at 30 September 2009.(vii) All items in the above income statements are deemed to accrue evenly over the year unless otherwise indicated.Required:(a) (i) Calculate the goodwill arising on the acquisition of Salva at 1 April 2009; (6 marks)(ii) Calculate the carrying amount of the investment in Ambra to be included within the consolidatedstatement of financial position as at 30 September 2009. (3 marks)(b) Prepare the consolidated income statement for the Pandar Group for the year ended 30 September 2009.(16 marks)

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考题 The following trial balance relates to Sandown at 30 September 2009:The following notes are relevant:(i) Sandown’s revenue includes $16 million for goods sold to Pending on 1 October 2008. The terms of the sale are that Sandown will incur ongoing service and support costs of $1·2 million per annum for three years after the sale. Sandown normally makes a gross profit of 40% on such servicing and support work. Ignore the time value of money.(ii) Administrative expenses include an equity dividend of 4·8 cents per share paid during the year.(iii) The 5% convertible loan note was issued for proceeds of $20 million on 1 October 2007. It has an effective interest rate of 8% due to the value of its conversion option.(iv) During the year Sandown sold an available-for-sale investment for $11 million. At the date of sale it had acarrying amount of $8·8 million and had originally cost $7 million. Sandown has recorded the disposal of theinvestment. The remaining available-for-sale investments (the $26·5 million in the trial balance) have a fair value of $29 million at 30 September 2009. The other reserve in the trial balance represents the net increase in the value of the available-for-sale investments as at 1 October 2008. Ignore deferred tax on these transactions.(v) The balance on current tax represents the under/over provision of the tax liability for the year ended 30 September 2008. The directors have estimated the provision for income tax for the year ended 30 September 2009 at $16·2 million. At 30 September 2009 the carrying amounts of Sandown’s net assets were $13 million in excess of their tax base. The income tax rate of Sandown is 30%.(vi) Non-current assets:The freehold property has a land element of $13 million. The building element is being depreciated on astraight-line basis.Plant and equipment is depreciated at 40% per annum using the reducing balance method.Sandown’s brand in the trial balance relates to a product line that received bad publicity during the year which led to falling sales revenues. An impairment review was conducted on 1 April 2009 which concluded that, based on estimated future sales, the brand had a value in use of $12 million and a remaining life of only three years.However, on the same date as the impairment review, Sandown received an offer to purchase the brand for$15 million. Prior to the impairment review, it was being depreciated using the straight-line method over a10-year life.No depreciation/amortisation has yet been charged on any non-current asset for the year ended 30 September2009. Depreciation, amortisation and impairment charges are all charged to cost of sales.Required:(a) Prepare the statement of comprehensive income for Sandown for the year ended 30 September 2009.(13 marks)(b) Prepare the statement of financial position of Sandown as at 30 September 2009. (12 marks)Notes to the financial statements are not required.A statement of changes in equity is not required.

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考题 (a) The following information relates to Crosswire a publicly listed company.Summarised statements of financial position as at:The following information is available:(i) During the year to 30 September 2009, Crosswire embarked on a replacement and expansion programme for its non-current assets. The details of this programme are:On 1 October 2008 Crosswire acquired a platinum mine at a cost of $5 million. A condition of mining theplatinum is a requirement to landscape the mining site at the end of its estimated life of ten years. Thepresent value of this cost at the date of the purchase was calculated at $3 million (in addition to thepurchase price of the mine of $5 million).Also on 1 October 2008 Crosswire revalued its freehold land for the first time. The credit in the revaluationreserve is the net amount of the revaluation after a transfer to deferred tax on the gain. The tax rate applicable to Crosswire for deferred tax is 20% per annum.On 1 April 2009 Crosswire took out a finance lease for some new plant. The fair value of the plant was$10 million. The lease agreement provided for an initial payment on 1 April 2009 of $2·4 million followedby eight six-monthly payments of $1·2 million commencing 30 September 2009.Plant disposed of during the year had a carrying amount of $500,000 and was sold for $1·2 million. Theremaining movement on the property, plant and equipment, after charging depreciation of $3 million, wasthe cost of replacing plant.(ii) From 1 October 2008 to 31 March 2009 a further $500,000 was spent completing the developmentproject at which date marketing and production started. The sales of the new product proved disappointingand on 30 September 2009 the development costs were written down to $1 million via an impairmentcharge.(iii) During the year ended 30 September 2009, $4 million of the 10% convertible loan notes matured. Theloan note holders had the option of redemption at par in cash or to exchange them for equity shares on thebasis of 20 new shares for each $100 of loan notes. 75% of the loan-note holders chose the equity option.Ignore any effect of this on the other equity reserve.All the above items have been treated correctly according to International Financial Reporting Standards.(iv) The finance costs are made up of:Required:(i) Prepare a statement of the movements in the carrying amount of Crosswire’s non-current assets for theyear ended 30 September 2009; (9 marks)(ii) Calculate the amounts that would appear under the headings of ‘cash flows from investing activities’and ‘cash flows from financing activities’ in the statement of cash flows for Crosswire for the year ended30 September 2009.Note: Crosswire includes finance costs paid as a financing activity. (8 marks)(b) A substantial shareholder has written to the directors of Crosswire expressing particular concern over thedeterioration of the company’s return on capital employed (ROCE)Required:Calculate Crosswire’s ROCE for the two years ended 30 September 2008 and 2009 and comment on theapparent cause of its deterioration.Note: ROCE should be taken as profit before interest on long-term borrowings and tax as a percentage of equity plus loan notes and finance lease obligations (at the year end). (8 marks)

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考题 (a) Kayte operates in the shipping industry and owns vessels for transportation. In June 2014, Kayte acquired Ceemone whose assets were entirely investments in small companies. The small companies each owned and operated one or two shipping vessels. There were no employees in Ceemone or the small companies. At the acquisition date, there were only limited activities related to managing the small companies as most activities were outsourced. All the personnel in Ceemone were employed by a separate management company. The companies owning the vessels had an agreement with the management company concerning assistance with chartering, purchase and sale of vessels and any technical management. The management company used a shipbroker to assist with some of these tasks.Kayte accounted for the investment in Ceemone as an asset acquisition. The consideration paid and related transaction costs were recognised as the acquisition price of the vessels. Kayte argued that the vessels were only passive investments and that Ceemone did not own a business consisting of processes, since all activities regarding commercial and technical management were outsourced to the management company. As a result, the acquisition was accounted for as if the vessels were acquired on a stand-alone basis.Additionally, Kayte had borrowed heavily to purchase some vessels and was struggling to meet its debt obligations. Kayte had sold some of these vessels but in some cases, the bank did not wish Kayte to sell the vessel. In these cases, the vessel was transferred to a new entity, in which the bank retained a variable interest based upon the level of the indebtedness. Kayte’s directors felt that the entity was a subsidiary of the bank and are uncertain as to whether they have complied with the requirements of IFRS 3 Business Combinations and IFRS 10 Consolidated Financial Statements as regards the above transactions. (12 marks)(b) Kayte’s vessels constitute a material part of its total assets. The economic life of the vessels is estimated to be 30 years, but the useful life of some of the vessels is only 10 years because Kayte’s policy is to sell these vessels when they are 10 years old. Kayte estimated the residual value of these vessels at sale to be half of acquisition cost and this value was assumed to be constant during their useful life. Kayte argued that the estimates of residual value used were conservative in view of an immature market with a high degree of uncertainty and presented documentation which indicated some vessels were being sold for a price considerably above carrying value. Broker valuations of the residual value were considerably higher than those used by Kayte. Kayte argued against broker valuations on the grounds that it would result in greater volatility in reporting.Kayte keeps some of the vessels for the whole 30 years and these vessels are required to undergo an engine overhaul in dry dock every 10 years to restore their service potential, hence the reason why some of the vessels are sold. The residual value of the vessels kept for 30 years is based upon the steel value of the vessel at the end of its economic life. At the time of purchase, the service potential which will be required to be restored by the engine overhaul is measured based on the cost as if it had been performed at the time of the purchase of the vessel. In the current period, one of the vessels had to have its engine totally replaced after only eight years. Normally, engines last for the 30-year economic life if overhauled every 10 years. Additionally, one type of vessel was having its funnels replaced after 15 years but the funnels had not been depreciated separately. (11 marks)Required:Discuss the accounting treatment of the above transactions in the financial statements of Kayte.Note: The mark allocation is shown against each of the elements above.Professional marks will be awarded in question 3 for clarity and quality of presentation. (2 marks)

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考题 For the year just ended, N company had an earnings of$ 2 per share and paid a dividend of $ 1. 2 on its stock. The growth rate in net income and dividend are both expected to be a constant 7 percent per year, indefinitely. N company has a Beta of 0. 8, the risk - free interest rate is 6 percent, and the market risk premium is 8 percent. P Company is very similar to N company in growth rate, risk and dividend. payout ratio. It had 20 million shares outstanding and an earnings of $ 36 million for the year just ended. The earnings will increase to $ 38. 5 million the next year. Requirement : A. Calculate the expected rate of return on N company 's equity. B. Calculate N Company 's current price-earning ratio and prospective price - earning ratio. C. Using N company 's current price-earning ratio, value P company 's stock price. D. Using N company 's prospective price - earning ratio, value P company 's stock price.

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考题单选题It can be inferred from the passage that the isotope record taken from ocean sediments would be less useful to researchers if which of the following were true?A It indicated that lighter isotopes of oxygen predominated at certain times.B It had far more gaps in its sequence than the record taken from rocks on land.C It indicated that climate shifts did not occur every 100,000 years.D It indicated that the ratios of oxygen 16 and oxygen 18 in ocean water were not consistent with those found in fresh water.E It stretched back for only a million years.

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考题问答题Passage 1　　The cost of staging the year 2000 Olympics in Sydney is estimated to be a staggering $ 9 million, but (1) the city is preparing to the financial benefits that come from holding such an international event by equaling the commercial success of Los Angeles, the only city yet to have made a demonstrable profit from the Games in 1984. At precisely 4:20 a.m. on Friday the 24th of September 1993, it was announced that Sydney had beaten five other competing cities around the world, and Australians everywhere, not only Sydneysiders, were justifiably proud of the result. (2) But, if Sydney had lost the bid, would the taxpayers of New South Wales and of Australia have approved of governments spending millions of dollars in a failed and costly exercise?　　There may have been some consolation in the fact that the bid came in $ l million below the revised budget and $ 5 million below the original budget of $ 29 million formulated in mid-1991. However, the final cost was the considerable sum of $ 24 million, the bulk of which was paid for by corporate and community contributions, merchandising, licensing, and the proceeds of lotteries, with the NSW Government, which had originally been willing to spend up to $ 10 million, contributing some $ 2 million. (3) The Federal Government’s grant of $ 5 million meant, in effect, that the Sydney bid was financed by every Australian taxpayer.　　Prior to the announcement of the winning city, there was considerable debate about the wisdom of taking financial risks of this kind at a time of economic recession. (4) Others argued that 70% of the facilities were already in place, and all were on government-owned land, removing some potential areas of conflict which troubled previous Olympic bidders. The former NSW Premier, Mr. Nick Greiner, went on record as saying that the advantage of having the Games… “is not that you are going to have $ 7.4 billion in extra gross domestic product over the next 14 years.” (5) I think the real point is the psychological change, the gaining of confidence, apart from the other more obvious reasons, such as the building of sporting facilities, tourism, and things of that nature.

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