ACCA考试 2022_02_16 每日一练
(d) What criteria would you use to assess whether Universal is an ‘excellent’ company? (5 marks)
3 The Chemical Services Group plc (CSG), which operates a divisionalised structure, provides services to industrial and
domestic customers in Swingland, a country whose economic climate is subject to significant variations. There have
been a number of recent changes at board level within CSG and therefore the managing director called a meeting of
the board of directors at which each of four recently appointed directors put forward their view as to what their primary
focus should be. These were as follows:
The research and development director stated that ‘my primary focus is upon ensuring that we continue to develop
the products and services that satisfy the requirements of our existing and potential customers’.
The finance director stated that ‘my primary focus is upon keeping our investors satisfied’.
The human resources director stated that ‘my primary focus is upon ensuring that we take all the steps necessary to
establish and maintain our reputation as a responsible employer’.
The corporate affairs director stated that ‘my primary focus is upon the need to ensure that we are recognised as a
socially responsible organisation’.
Required:
(a) Discuss the criteria that should be considered in deciding upon suitable performance measures in respect of
the primary focus of each of the FOUR directors of CSG providing THREE appropriate quantitative measures
for each primary focus.
Note: your answer may include financial or non-financial quantitative measures. (12 marks)
(iii) State any disadvantages to the relief in (i) that Sharon should be aware of, and identify and describe
another relief that she might use. (4 marks)
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)
(iii) Advice in connection with the sale of the manufacturing premises by Tethys Ltd; (7 marks)
You are the manager responsible for performing hot reviews on audit files where there is a potential disagreement
between your firm and the client regarding a material issue. You are reviewing the going concern section of the audit
file of Dexter Co, a client with considerable cash flow difficulties, and other, less significant operational indicators of
going concern problems. The working papers indicate that Dexter Co is currently trying to raise finance to fund
operating cash flows, and state that if the finance is not received, there is significant doubt over the going concern
status of the company. The working papers conclude that the going concern assumption is appropriate, but it is
recommended that the financial statements should contain a note explaining the cash flow problems faced by the
company, along with a description of the finance being sought, and an evaluation of the going concern status of the
company. The directors do not wish to include the note in the financial statements.
Required:
(b) Consider and comment on the possible reasons why the directors of Dexter Co are reluctant to provide the
note to the financial statements. (5 marks)
(ii) Using the previous overhead allocation basis (as per note 4), calculate the budgeted profit/(loss)
attributable to each type of service for the year ending 31 December 2006 and comment on the results
obtained using the previous and revised methods of overhead allocation. (5 marks)
5 A management accounting focus for performance management in an organisation may incorporate the following:
(1) the determination and quantification of objectives and strategies
(2) the measurement of the results of the strategies implemented and of the achievement of the results through a
number of determinants
(3) the application of business change techniques, in the improvement of those determinants.
Required:
(a) Discuss the meaning and inter-relationship of the terms (shown in bold type) in the above statement. Your
answer should incorporate examples that may be used to illustrate each term in BOTH profit-seeking
organisations and not-for-profit organisations in order to highlight any differences between the two types of
organisation. (14 marks)
(b) Explain how the non-payment of contributions and the change in the pension benefits should be treated in
the financial statements of Savage for the year ended 31 October 2005. (4 marks)
(b) For this part, assume today’s date is 1 May 2010.
Bill and Ben decided not to sell their company, and instead expanded the business themselves. Ben, however,
is now pursuing other interests, and is no longer involved with the day to day activities of Flower Limited. Bill
believes that the company would be better off without Ben as a voting shareholder, and wishes to buy Ben’s
shares. However, Bill does not have sufficient funds to buy the shares himself, and so is wondering if the
company could acquire the shares instead.
The proposed price for Ben’s shares would be ￡500,000. Both Bill and Ben pay income tax at the higher rate.
Required:
Write a letter to Ben:
(1) stating the income tax (IT) and/or capital gains tax (CGT) implications for Ben if Flower Limited were to
repurchase his 50% holding of ordinary shares, immediately in May 2010; and
(2) advising him of any available planning options that might improve this tax position. Clearly explain any
conditions which must be satisfied and quantify the tax savings which may result.
(13 marks)
Assume that the corporation tax rates for the financial year 2005 and the income tax rates and allowances
for the tax year 2005/06 apply throughout this question.