ACCA考试 2022_03_16 每日一练
(c) Wader is reviewing the accounting treatment of its buildings. The company uses the ‘revaluation model’ for its
buildings. The buildings had originally cost $10 million on 1 June 2005 and had a useful economic life of
20 years. They are being depreciated on a straight line basis to a nil residual value. The buildings were revalued
downwards on 31 May 2006 to $8 million which was the buildings’ recoverable amount. At 31 May 2007 the
value of the buildings had risen to $11 million which is to be included in the financial statements. The company
is 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 May
2007.
Note: a discount rate of 5% should be used where necessary. Candidates should show suitable calculations where
necessary.
(ii) Recommend which of the refrigeration systems should be purchased. You should state your reasons
which must be supported by relevant calculations. (3 marks)
5 Which of the following events after the balance sheet date would normally qualify as adjusting events according
to IAS 10 Events after the balance sheet date?
1 The bankruptcy of a credit customer with a balance outstanding at the balance sheet date.
2 A decline in the market value of investments.
3 The declaration of an ordinary dividend.
4 The determination of the cost of assets purchased before the balance sheet date.
A 1, 3, and 4
B 1 and 2 only
C 2 and 3 only
D 1 and 4 only
(b) (i) Advise the directors of GWCC on specific actions which may be considered in order to improve the
estimated return on their investment of £1,900,000. (8 marks)
3 The managers of Daylon plc are reviewing the company’s investment portfolio. About 15% of the portfolio is represented by a holding of 5,550,000 ordinary shares of Mondglobe plc. The managers are concerned about the effect on portfolio value if the price of Mondglobe’s shares should fall, and are considering selling the shares. Daylon’s investment bank has suggested that the risk of Mondglobe’s shares falling by more than 5% from their current value could be protected against by buying an over the counter option. The investment bank is prepared to sell an appropriate six month option to Daylon for £250,000.
Other information:
(i) The current market price of Mondglobe’s ordinary shares is 360 pence.
(ii) The annual volatility (variance) of Mondglobe’s shares for the last year was 169%.
(iii) The risk free rate is 4% per year.
(iv) No dividend is expected to be paid by Mondglobe during the next six months.
Required:
(a) Evaluate whether or not the price at which the investment bank is willing to sell the option is a fair price.(10 marks)
3 Mark Howe, Managing Director of Auto Direct, is a victim of his own success. Mark has created an innovative way
of selling cars to the public which takes advantage of the greater freedom given to independent car distributors to
market cars more aggressively within the European Union. This reduces the traditional control and interference of the
automobile manufacturers, some of whom own their distributors. He has opened a number of showrooms in the
London region and by 2004 Auto Direct had 20 outlets in and around London. The concept is deceptively simple;
Mark buys cars from wherever he can source them most cheaply and has access to all of the leading volume car
models. He then concentrates on selling the cars to the public, leaving servicing and repair work to other specialist
garages. He offers a classic high volume/low margin business model.
Mark now wants to develop this business model onto a national and eventually an international basis. His immediate
plans are to grow the number of outlets by 50% each year for the next three years. Such growth will place
considerable strain on the existing organisation and staff. Each showroom has its own management team, sales
personnel and administration. Currently the 20 showrooms are grouped into a Northern and Southern Sales Division
with a small head office team for each division. Auto Direct now employs 250 people.
Mark now needs to communicate the next three-year phase of the company’s ambitious growth plans to staff and is
anxious to get an understanding of staff attitudes towards the company and its growth plans. He is aware that you
are a consultant used to advising firms on the changes associated with rapid growth and the way to generate positive
staff attitudes to change.
Required:
(a) Using appropriate strategies for managing change provide Mark with a brief report on how he can best create
a positive staff response to the proposed growth plans. (12 marks)
(c) In August 2004 it was discovered that the inventory at 31 December 2003 had been overstated by $100,000.
(4 marks)
Required:
Advise the directors on the correct treatment of these matters, stating the relevant accounting standard which
justifies your answer in each case.
NOTE: The mark allocation is shown against each of the three matters.
(b) Explain how Perfect Shopper might re-structure its upstream supply chain to address the problems identified
in the scenario. (10 marks)