ACCA考试 2022_07_17 每日一练
(c) Describe the main stages of a formal grievance procedure that Oliver should now pursue. (10 marks)
3 The directors of Panel, a public limited company, are reviewing the procedures for the calculation of the deferred tax
provision for their company. They are quite surprised at the impact on the provision caused by changes in accounting
standards such as IFRS1 ‘First time adoption of International Financial Reporting Standards’ and IFRS2 ‘Share-based
Payment’. Panel is adopting International Financial Reporting Standards for the first time as at 31 October 2005 and
the directors are unsure how the deferred tax provision will be calculated in its financial statements ended on that
date including the opening provision at 1 November 2003.
Required:
(a) (i) Explain how changes in accounting standards are likely to have an impact on the provision for deferred
taxation under IAS12 ‘Income Taxes’. (5 marks)
4 The country of Europia has an extensive historical and industrial heritage. It has many tourist sites (such as castles,
palaces, temples, houses and factories) which attract visitors from home and abroad. Most of these tourist sites have
gift shops where visitors can buy mementos and souvenirs of their visit. These souvenirs often include cups, saucers,
plates and other items which feature a printed image of the particular tourist site.
The Universal Pottery Company (UPC) is the main supplier of these pottery souvenir items to the tourist trade. It
produces the items in its potteries and then applies the appropriate image using specialised image printing machines.
UPC also supplies other organisations that require personalised products. For example, it recently won the right to
produce souvenirs for the Eurasian Games, which are being held in Europia in two years time. UPC currently ships
about 250,000 items of pottery out of its factory every month. Most of these items are shipped in relatively small
packages. All collections from the factory and deliveries to customers are made by a nationwide courier company.
In the last two years there has been a noticeable increase in the number of complaints about the quality of these
items. The complaints, from gift shop owners, concentrate on two main issues:
(i) The physical condition of goods when they arrive at the gift shop. Initial evidence suggests that ‘a significant
number of products are now arriving broken, chipped or cracked’. These items are unusable and they have to be
returned to UPC. UPC management are convinced that the increased breakages are due to packers not following
the correct packing method.
(ii) Incorrect alignment of the image of the tourist site on the selected item. For example, a recent batch of 100 cups
for Carish Castle included 10 cups where the image of the castle sloped significantly from left to right. These
were returned by the customer and destroyed by UPC.
The image problem was investigated in more depth and it was discovered that approximately 500 items were
delivered every month with misaligned images. Each item costs, on average, $20 to produce.
As a result of these complaints, UPC appointed a small quality inspection team who were asked to inspect one in
every 20 packages for correct packaging and correct image alignment. However, although some problems have been
found, a significant number of defective products have still been delivered to customers. A director of UPC used this
evidence to support his assertion that the ‘quality inspection team is just not working’.
The payment system for packers has also been such an issue. It was established ten years ago as an attempt to boost
productivity. Packers receive a bonus for packing more than a target number of packages per hour. Hence, packers
are more concerned with the speed of packing rather than its quality.
Finally, there is also evidence that to achieve agreed customer deadlines, certain managers have asked the quality
inspection team to overlook defective items so that order deadlines could be met.
The company has decided to review the quality issue again. The director who claimed that the quality inspection team
is not working has suggested using a Six Sigma approach to the company’s quality problems.
Required:
(a) Analyse the current and potential role of quality, quality control and quality assurance at UPC. (15 marks)
(c) In October 2004, Volcan commenced the development of a site in a valley of ‘outstanding natural beauty’ on
which to build a retail ‘megastore’ and warehouse in late 2005. Local government planning permission for the
development, which was received in April 2005, requires that three 100-year-old trees within the valley be
preserved and the surrounding valley be restored in 2006. Additions to property, plant and equipment during
the 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 paid
to 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 ended
31 March 2005.
NOTE: The mark allocation is shown against each of the three issues.
3 On 1 January 2007 Dovedale Ltd, a company with no subsidiaries, intends to purchase 65% of the ordinary share
capital of Hira Ltd from Belgrove Ltd. Belgrove Ltd currently owns 100% of the share capital of Hira Ltd and has no
other subsidiaries. All three companies have their head offices in the UK and are UK resident.
Hira Ltd had trading losses brought forward, as at 1 April 2006, of ￡18,600 and no income or gains against which
to offset losses in the year ended 31 March 2006. In the year ending 31 March 2007 the company expects to make
further tax adjusted trading losses of ￡55,000 before deduction of capital allowances, and to have no other income
or gains. The tax written down value of Hira Ltd’s plant and machinery as at 31 March 2006 was ￡96,000 and
there will be no fixed asset additions or disposals in the year ending 31 March 2007. In the year ending 31 March
2008 a small tax adjusted trading loss is anticipated. Hira Ltd will surrender the maximum possible trading losses
to Belgrove Ltd and Dovedale Ltd.
The tax adjusted trading profit of Dovedale Ltd for the year ending 31 March 2007 is expected to be ￡875,000 and
to continue at this level in the future. The profits chargeable to corporation tax of Belgrove Ltd are expected to be
￡38,000 for the year ending 31 March 2007 and to increase in the future.
On 1 February 2007 Dovedale Ltd will sell a small office building to Hira Ltd for its market value of ￡234,000.
Dovedale Ltd purchased the building in March 2005 for ￡210,000. In October 2004 Dovedale Ltd sold a factory
for ￡277,450 making a capital gain of ￡84,217. A claim was made to roll over the gain on the sale of the factory
against the acquisition cost of the office building.
On 1 April 2007 Dovedale Ltd intends to acquire the whole of the ordinary share capital of Atapo Inc, an unquoted
company resident in the country of Morovia. Atapo Inc sells components to Dovedale Ltd as well as to other
companies in Morovia and around the world.
It is estimated that Atapo Inc will make a profit before tax of ￡160,000 in the year ending 31 March 2008 and will
pay a dividend to Dovedale Ltd of ￡105,000. It can be assumed that Atapo Inc’s taxable profits are equal to its profit
before tax. The rate of corporation tax in Morovia is 9%. There is a withholding tax of 3% on dividends paid to
non-Morovian resident shareholders. There is no double tax agreement between the UK and Morovia.
Required:
(a) Advise Belgrove Ltd of any capital gains that may arise as a result of the sale of the shares in Hira Ltd. You
are not required to calculate any capital gains in this part of the question. (4 marks)
In 2014 Mr Yuan inherited an estate of RMB2 million from his uncle who had died two months earlier.
What is the correct treatment of the estate income for individual income tax purposes?
A.The estate income is not taxable
B.The estate income will be taxed as occasional (ad hoc) income
C.The estate income will be taxed as other income
D.The estate income will be taxed as service income
(b) Determine whether the factoring company’s offer can be recommended on financial grounds. Assume a
working year of 365 days and base your analysis on financial information for 2006. (8 marks)
(ii) Advise Clifford of the capital gains tax implications of the alternative of selling the Oxford house and
garden by means of two separate disposals as proposed. Calculations are not required for this part of
the question. (3 marks)
3 The Global Hotel Group (GHG) operates hotels in most of the developed countries throughout the world. The directors
of GHG are committed to a policy of achieving ‘growth’ in terms of geographical coverage and are now considering
building and operating another hotel in Tomorrowland. Tomorrowland is a developing country which is situated 3,000
kilometres from the country in which GHG’s nearest hotel is located.
The managing director of GHG recently attended a seminar on ‘the use of strategic and economic information in
planning organisational performance’.
He has called a board meeting to discuss the strategic and economic factors which should be considered before a
decision is made to build the hotel in Tomorrowland.
Required:
(a) Discuss the strategic and economic factors which should be considered before a decision is made to build
the hotel. (14 marks)