(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.

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 (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.

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考题 (b) On 31 May 2007, Leigh purchased property, plant and equipment for $4 million. The supplier has agreed toaccept payment for the property, plant and equipment either in cash or in shares. The supplier can either choose1·5 million shares of the company to be issued in six months time or to receive a cash payment in three monthstime equivalent to the market value of 1·3 million shares. It is estimated that the share price will be $3·50 inthree months time and $4 in six months time.Additionally, at 31 May 2007, one of the directors recently appointed to the board has been granted the right tochoose either 50,000 shares of Leigh or receive a cash payment equal to the current value of 40,000 shares atthe settlement date. This right has been granted because of the performance of the director during the year andis unconditional at 31 May 2007. The settlement date is 1 July 2008 and the company estimates the fair valueof the share alternative is $2·50 per share at 31 May 2007. The share price of Leigh at 31 May 2007 is $3 pershare, and if the director chooses the share alternative, they must be kept for a period of four years. (9 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 4 (a) Router, a public limited company operates in the entertainment industry. It recently agreed with a televisioncompany to make a film which will be broadcast on the television company’s network. The fee agreed for thefilm was $5 million with a further $100,000 to be paid every time the film is shown on the television company’schannels. It is hoped that it will be shown on four occasions. The film was completed at a cost of $4 million anddelivered to the television company on 1 April 2007. The television company paid the fee of $5 million on30 April 2007 but indicated that the film needed substantial editing before they were prepared to broadcast it,the costs of which would be deducted from any future payments to Router. The directors of Router wish torecognise the anticipated future income of $400,000 in the financial statements for the year ended 31 May2007. (5 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 (c) At 1 June 2006, Router held a 25% shareholding in a film distribution company, Wireless, a public limitedcompany. On 1 January 2007, Router sold a 15% holding in Wireless thus reducing its investment to a 10%holding. Router no longer exercises significant influence over Wireless. Before the sale of the shares the net assetvalue of Wireless on 1 January 2007 was $200 million and goodwill relating to the acquisition of Wireless was$5 million. Router received $40 million for its sale of the 15% holding in Wireless. At 1 January 2007, the fairvalue of the remaining investment in Wireless was $23 million and at 31 May 2007 the fair value was$26 million. (6 marks)Required:Discuss how the above items should be dealt with in the group financial statements of Router for the year ended31 May 2007.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) One of the hotels owned by Norman is a hotel complex which includes a theme park, a casino and a golf course,as well as a hotel. The theme park, casino, and hotel were sold in the year ended 31 May 2008 to Conquest, apublic limited company, for $200 million but the sale agreement stated that Norman would continue to operateand manage the three businesses for their remaining useful life of 15 years. The residual interest in the businessreverts back to Norman after the 15 year period. Norman would receive 75% of the net profit of the businessesas operator fees and Conquest would receive the remaining 25%. Norman has guaranteed to Conquest that thenet minimum profit paid to Conquest would not be less than $15 million. (4 marks)Norman has recently started issuing vouchers to customers when they stay in its hotels. The vouchers entitle thecustomers to a $30 discount on a subsequent room booking within three months of their stay. Historicalexperience has shown that only one in five vouchers are redeemed by the customer. At the company’s year endof 31 May 2008, it is estimated that there are vouchers worth $20 million which are eligible for discount. Theincome from room sales for the year is $300 million and Norman is unsure how to report the income from roomsales in the financial statements. (4 marks)Norman has obtained a significant amount of grant income for the development of hotels in Europe. The grantshave been received from government bodies and relate to the size of the hotel which has been built by the grantassistance. The intention of the grant income was to create jobs in areas where there was significantunemployment. The grants received of $70 million will have to be repaid if the cost of building the hotels is lessthan $500 million. (4 marks)Appropriateness and quality of discussion (2 marks)Required:Discuss how the above income would be treated in the financial statements of Norman for the year ended31 May 2008.

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考题 (c) On 1 May 2007 Sirus acquired another company, Marne plc. The directors of Marne, who were the onlyshareholders, were offered an increased profit share in the enlarged business for a period of two years after thedate of acquisition as an incentive to accept the purchase offer. After this period, normal remuneration levels willbe resumed. Sirus estimated that this would cost them $5 million at 30 April 2008, and a further $6 million at30 April 2009. These amounts will be paid in cash shortly after the respective year ends. (5 marks)Required:Draft a report to the directors of Sirus which discusses the principles and nature of the accounting treatment ofthe above elements under International Financial Reporting Standards in the financial statements for the yearended 30 April 2008.

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考题 3 You are the manager responsible for the audit of Albreda Co, a limited liability company, and its subsidiaries. Thegroup mainly operates a chain of national restaurants and provides vending and other catering services to corporateclients. All restaurants offer ‘eat-in’, ‘take-away’ and ‘home delivery’ services. The draft consolidated financialstatements for the year ended 30 September 2005 show revenue of $42·2 million (2004 – $41·8 million), profitbefore taxation of $1·8 million (2004 – $2·2 million) and total assets of $30·7 million (2004 – $23·4 million).The following issues arising during the final audit have been noted on a schedule of points for your attention:(a) In September 2005 the management board announced plans to cease offering ‘home delivery’ services from theend of the month. These sales amounted to $0·6 million for the year to 30 September 2005 (2004 – $0·8million). A provision of $0·2 million has been made as at 30 September 2005 for the compensation of redundantemployees (mainly drivers). Delivery vehicles have been classified as non-current assets held for sale as at 30September 2005 and measured at fair value less costs to sell, $0·8 million (carrying amount,$0·5 million). (8 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 (c) During the year Albreda paid $0·1 million (2004 – $0·3 million) in fines and penalties relating to breaches ofhealth and safety regulations. These amounts have not been separately disclosed but included in cost of sales.(5 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 (c) In October 2004, Volcan commenced the development of a site in a valley of ‘outstanding natural beauty’ onwhich to build a retail ‘megastore’ and warehouse in late 2005. Local government planning permission for thedevelopment, which was received in April 2005, requires that three 100-year-old trees within the valley bepreserved and the surrounding valley be restored in 2006. Additions to property, plant and equipment duringthe year include $4·4 million for the estimated cost of site restoration. This estimate includes a provision of$0·4 million for the relocation of the 100-year-old trees.In March 2005 the trees were chopped down to make way for a car park. A fine of $20,000 per tree was paidto the local government in May 2005. (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 3 You are the manager responsible for the audit of Keffler Co, a private limited company engaged in the manufacture ofplastic products. The draft financial statements for the year ended 31 March 2006 show revenue of $47·4 million(2005 – $43·9 million), profit before taxation of $2 million (2005 – $2·4 million) and total assets of $33·8 million(2005 – $25·7 million).The following issues arising during the final audit have been noted on a schedule of points for your attention:(a) In April 2005, Keffler bought the right to use a landfill site for a period of 15 years for $1·1 million. Kefflerexpects that the amount of waste that it will need to dump will increase annually and that the site will becompletely filled after just ten years. Keffler has charged the following amounts to the income statement for theyear to 31 March 2006:– $20,000 licence amortisation calculated on a sum-of-digits basis to increase the charge over the useful lifeof the site; and– $100,000 annual provision for restoring the land in 15 years’ time. (9 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) Seymour offers health-related information services through a wholly-owned subsidiary, Aragon Co. Goodwill of$1·8 million recognised on the purchase of Aragon in October 2004 is not amortised but included at cost in theconsolidated balance sheet. At 30 September 2006 Seymour’s investment in Aragon is shown at cost,$4·5 million, in its separate financial statements.Aragon’s draft financial statements for the year ended 30 September 2006 show a loss before taxation of$0·6 million (2005 – $0·5 million loss) and total assets of $4·9 million (2005 – $5·7 million). The notes toAragon’s financial statements disclose that they have been prepared on a going concern basis that assumes thatSeymour will continue to provide financial support. (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 (c) In November 2006 Seymour announced the recall and discontinuation of a range of petcare products. Theproduct recall was prompted by the high level of customer returns due to claims of poor quality. For the year to30 September 2006, the product range represented $8·9 million of consolidated revenue (2005 – $9·6 million)and $1·3 million loss before tax (2005 – $0·4 million profit before tax). The results of the ‘petcare’ operationsare disclosed separately on the face of the income statement. (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 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 3 You are the manager responsible for the audit of Lamont Co. The company’s principal activity is wholesaling frozenfish. The draft consolidated financial statements for the year ended 31 March 2007 show revenue of $67·0 million(2006 – $62·3 million), profit before taxation of $11·9 million (2006 – $14·2 million) and total assets of$48·0 million (2006 – $36·4 million).The following issues arising during the final audit have been noted on a schedule of points for your attention:(a) In early 2007 a chemical leakage from refrigeration units owned by Lamont caused contamination of some of itsproperty. Lamont has incurred $0·3 million in clean up costs, $0·6 million in modernisation of the units toprevent future leakage and a $30,000 fine to a regulatory agency. Apart from the fine, which has been expensed,these costs have been capitalised as improvements. (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 Lamont Co for the year ended31 March 2007.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 5 You are the manager responsible for the audit of Blod Co, a listed company, for the year ended 31 March 2008. Yourfirm was appointed as auditors of Blod Co in September 2007. The audit work has been completed, and you arereviewing the working papers in order to draft a report to those charged with governance. The statement of financialposition (balance sheet) shows total assets of $78 million (2007 – $66 million). The main business activity of BlodCo is the manufacture of farm machinery.During the audit of property, plant and equipment it was discovered that controls over capital expenditure transactionshad deteriorated during the year. Authorisation had not been gained for the purchase of office equipment with a costof $225,000. No material errors in the financial statements were revealed by audit procedures performed on property,plant and equipment.An internally generated brand name has been included in the statement of financial position (balance sheet) at a fairvalue of $10 million. Audit working papers show that the matter was discussed with the financial controller, whostated that the $10 million represents the present value of future cash flows estimated to be generated by the brandname. The member of the audit team who completed the work programme on intangible assets has noted that thistreatment appears to be in breach of IAS 38 Intangible Assets, and that the management refuses to derecognise theasset.Problems were experienced in the audit of inventories. Due to an oversight by the internal auditors of Blod Co, theexternal audit team did not receive a copy of inventory counting procedures prior to attending the count. This causeda delay at the beginning of the inventory count, when the audit team had to quickly familiarise themselves with theprocedures. In addition, on the final audit, when the audit senior requested documentation to support the finalinventory valuation, it took two weeks for the information to be received because the accountant who had preparedthe schedules had mislaid them.Required:(a) (i) Identify the main purpose of including ‘findings from the audit’ (management letter points) in a reportto those charged with governance. (2 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 You are the audit supervisor of Maple Co and are currently planning the audit of an existing client, Sycamore Science Co (Sycamore), whose year end was 30 April 2015. Sycamore is a pharmaceutical company, which manufactures and supplies a wide range of medical supplies. The draft financial statements show revenue of $35·6 million and profit before tax of $5·9 million.Sycamore’s previous finance director left the company in December 2014 after it was discovered that he had been claiming fraudulent expenses from the company for a significant period of time. A new finance director was appointed in January 2015 who was previously a financial controller of a bank, and she has expressed surprise that Maple Co had not uncovered the fraud during last year’s audit.During the year Sycamore has spent $1·8 million on developing several new products. These projects are at different stages of development and the draft financial statements show the full amount of $1·8 million within intangible assets. In order to fund this development, $2·0 million was borrowed from the bank and is due for repayment over a ten-year period. The bank has attached minimum profit targets as part of the loan covenants.The new finance director has informed the audit partner that since the year end there has been an increased number of sales returns and that in the month of May over $0·5 million of goods sold in April were returned.Maple Co attended the year-end inventory count at Sycamore’s warehouse. The auditor present raised concerns that during the count there were movements of goods in and out the warehouse and this process did not seem well controlled.During the year, a review of plant and equipment in the factory was undertaken and surplus plant was sold, resulting in a profit on disposal of $210,000.Required:(a) State Maples Co’s responsibilities in relation to the prevention and detection of fraud and error. (4 marks)(b) Describe SIX audit risks, and explain the auditor’s response to each risk, in planning the audit of Sycamore Science Co. (12 marks)(c) Sycamore’s new finance director has read about review engagements and is interested in the possibility of Maple Co undertaking these in the future. However, she is unsure how these engagements differ from an external audit and how much assurance would be gained from this type of engagement.Required:(i) Explain the purpose of review engagements and how these differ from external audits; and (2 marks)(ii) Describe the level of assurance provided by external audits and review engagements. (2 marks)

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考题 R1 has 5 working interfaces, with EIGRP neighbors existing off each interface. R1 has routes for subnets 10.1.1.0/24, 10.1.2.0/24, and 10.1.3.0/24, with EIGRP integer metrics of roughly 1 million, 2 million, a nd 3 million, respectively. An engineer then adds the ip summary - address eigrp 1 10.1.0.0 255.255.0.0 command to interface Fa0/0.Which of the following is true?（）A. R1 loses and then reestablishes neighborships with all neighbors.B. R1 no longer advert ises 10.1.1.0/24 to neighbors connected to Fa0/0.C. 1 advertises a 10.1.0.0/16 route out Fa0/0, with metric of around 3 million (largest metric of component subnets).D. R1 advertises a 10.1.0.0/16 route out Fa0/0,with metric of around 2 million (med ian metric of component subnets).

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考题 For GMDSS，when may a compulsory vessel not be allowed to leave port ________．A.When the vessel is in an overloaded conditionB.When the vessel has arranged for both duplication of equipment AND shore-based maintenanceC.When the vessel has replaced a required piece of GMDSS-related equipment but its performance has not been verified or loggedD.When the vessel is carrying only two licensed GMDSS Radio Operators and is capable of performing all required functions

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考题单选题Mortgage and other financing income decreased $8.8 million to $18.8 for the year ended December 31, 2006.The income in 2006 was reducedA to $ 8.8 million.B to $18.8 million.C from $18.8 million to $8.8 million.

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考题单选题R1 has 5 working interfaces, with EIGRP neighbors existing off each interface. R1 has routes for subnets 10.1.1.0/24, 10.1.2.0/24, and 10.1.3.0/24, with EIGRP integer metrics of roughly 1 million, 2 million, a nd 3 million, respectively. An engineer then adds the ip summary - address eigrp 1 10.1.0.0 255.255.0.0 command to interface Fa0/0. Which of the following is true?（）A R1 loses and then reestablishes neighborships with all neighbors.B R1 no longer advert ises 10.1.1.0/24 to neighbors connected to Fa0/0.C 1 advertises a 10.1.0.0/16 route out Fa0/0, with metric of around 3 million (largest metric of component subnets).D R1 advertises a 10.1.0.0/16 route out Fa0/0,with metric of around 2 million (med ian metric of component subnets).

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考题单选题How much loss will the shutdown cause the government in royalties and taxes in a week?A About $44.8 million.B About $2.8 million.C About $28 million.D About $4.48 million.

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