2020年ACCA考试教材在哪能买到？

2 Benny Korere has been employed as the sales director of Golden Tan plc since 1994. He earns an annual salary of

￡32,000 and is provided with a petrol-driven company car which has a CO2 emission rate of 187g/km and had a

list price when new of ￡22,360. In August 2003, when he was first provided with the car, Benny paid the company

￡6,100 towards the capital cost of the car. Golden Tan plc does not pay for any of Benny’s private petrol and he is

also required to pay his employer ￡18 per month as a condition of being able to use the car for private purposes.

On 1 December 2006 Golden Tan plc notified Benny that he would be made redundant on 28 February 2007. On

that day the company will pay him his final month’s salary together with a payment of ￡8,000 in lieu of the three

remaining months of his six-month notice period in accordance with his employment contract. In addition the

company will pay him ￡17,500 in return for agreeing not to work for any of its competitors for the six-month period

ending 31 August 2007.

On receiving notification of his redundancy, Benny immediately contacted Joe Egmont, the managing director of

Summer Glow plc, who offered him a senior management position leading the company’s expansion into Eastern

Europe. Summer Glow plc is one of Golden Tan plc’s competitors and one of the most innovative companies in the

industry, although not all of its strategies have been successful.

Benny has agreed to join Summer Glow plc on 1 September 2007 for an annual salary of ￡39,000. On the day he

joins the company, Summer Glow plc will grant him an option to purchase 10,000 ordinary shares in the company

for ￡2·20 per share under an unapproved share option scheme. Benny can exercise the option once he has been

employed for six months but must hold the shares for at least a year before he sells them.

The new job will require Benny to spend a considerable amount of time in London. Summer Glow plc has offered

Benny the exclusive use of a flat that the company purchased on 1 June 2003 for ￡165,000; the flat is currently

rented out. The flat will be made available from 1 September 2007. The company will pay all of the utility bills

relating to the flat as well as furnishing and maintaining it. Summer Glow plc has also suggested that if Benny would

rather live in a more central part of the city, the company could sell the existing flat and buy a more centrally located

one, of the same value, with the proceeds.

On 15 March 2007 Benny intends to sell 5,800 shares in Mahana plc, a quoted company, for ￡24,608. His

transactions in the company’s shares have been as follows:

￡

June 1988 Purchased 8,400 shares 6,744

February 1996 Sale of rights nil paid 610

January 2005 Purchased 1,300 shares 2,281

The sale of rights, nil paid, was not treated as a part disposal of Benny’s holding in Mahana plc.

Benny’s shareholding in Mahana plc represents less than 1% of the company’s issued ordinary share capital. He will

not make any other capital disposals in 2006/07.

In addition to his employment income, Benny receives rental income of ￡4,000 (net of deductible expenses) each

year. He normally submits his tax return in August but he has not yet prepared his return for 2005/06. He expects

to be very busy in December and January and is planning to prepare his tax return in late February 2007.

Required:

(a) Calculate Benny’s employment income for 2006/07. (4 marks)

3 Clyde Williams is facing a dilemma. He has successfully built up a small family-owned company, Concrete Solutions

Ltd, manufacturing a range of concrete based products used in making roads, pavements and walkways. The

production technology is very low tech and uses simple wooden moulds into which the concrete is poured. As a

consequence he is able to use low skilled and low cost labour, which would find it difficult to find alternative

employment in a region with high unemployment levels. The company has employed many of its workforce since its

creation in 1996. The company’s products are heavy, bulky and costly to transport. This means its market is limited

to a 30-mile area around the small rural town where the manufacturing facility is located. Its customers are a mix of

private sector building firms and public sector local councils responsible for maintaining roads and pavements. By its

nature much of the demand is seasonal and very price sensitive.

A large international civil engineering company has recently approached Clyde with an opportunity to become a

supplier of concrete blocks used in a sophisticated system for preventing coast and riverbank erosion. The process

involves interlocking blocks being placed on a durable textile base. Recent trends in global warming and pressure in

many countries to build in areas liable to flooding have created a growing international market for the patented erosion

prevention system. Clyde has the opportunity to become the sole UK supplier of the blocks and to be one of a small

number of suppliers able to export the blocks to Europe. To do it he will need to invest a significant amount in CAM

(computer aided manufacturing) technology with a linked investment in the workforce skills needed to operate the

new technology. The net result will be a small increase in the size of the labour force but redundancy for a significant

number of its existing workers either unwilling or unable to adapt to the demands of the new technology. Successful

entry into this new market will reduce his reliance on the seasonal low margin concrete products he currently produces

and significantly improve profitability.

One further complication exists. Concrete Solutions is located in a quiet residential area of its home town. Clyde is

under constant pressure from the local residents and their council representatives to reduce the amount of noise and

dust created in the production process. Any move into making the new blocks will increase the pollution problems

the residents face. There is a possibility of moving the whole manufacturing process to a site on a new industrial estate

being built by the council in a rival town. However closure of the existing site would lead to a loss of jobs in the current

location. Clyde has asked for your help in resolving his dilemma.

Required:

(a) Using models where appropriate, advise Clyde on whether he should choose to take advantage of the

opportunity offered by the international company. (12 marks)

(ii) Can we entertain our clients as a gesture of goodwill or is corporate hospitality ruled out? (3 marks)

Required:

For EACH of the three FAQs, explain the threats to objectivity that may arise and the safeguards that should

be available to manage them to an acceptable level.

NOTE: The mark allocation is shown against each of the three questions.