SAPP f3 mock exam with answer

F3/FFA Financial Accounting Mock Exam with Answer SAPP Academy F fb.com/sapp.edu.vn T 096 972 94 63 W sapp.edu.vn SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn F3/FFA Financial Accounting Mock Exam This paper is divided into two sections: Section A - ALL 35 questions are compulsory and MUST be attempted Each question carries marks Section B - BOTH questions are compulsory and MUST be attempted Each question carries 15 marks You have two hours in which to complete the exam sapp.edu.vn | SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn SECTION A – Thirty-five questions, both of which MUST be attempted Which of the following are differences between sole traders and limited liability companies (1) A sole traders’ financial statements are private; a company’s financial statement are sent to shareholders and are publicly filed (2) Only companies have capital invested into the business (3) A sole trader is fully and personally liable for any losses that the company might make ABCD- and only and only and only 1,2,3 The purpose of a statement of financial position is to show A- The assets of the business and the claims against those assets B- A clear and definite estimate of what a business is really worth C- The amount the business could be sold for in liquidation D- The amount the business could be sold for as a going concern The separate entity concept requires that a business is treated as being separate from its owners Is this statement true or false? A- True B- False A company receives rent from a large number of properties The total received in the year ended 30 April 2008 was $1,154,880 The following were the amounts of rent in advance and in arrears at 30 April 2007 and 2008: 30 April 2007 30 April 2008 Rent received in advance $68,880 $74,880 Rent in arrears (all subsequently received) $50,880 $44,160 What amount of rental income should appear in the company’s Statement of Profit or Loss for the year ended 30 April 2008? A- $1,106,160 B- $1,203,600 C- $1,142,160 D- $1,167,600 sapp.edu.vn | SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn Vine sublets part of its office accommodation The rent is received quarterly in advance on January, April, July, and October each year The annual rent was $24,000, but was increased to $30,000 from July 2005 What amounts for rent should appear in the company’s financial statements for the year ended 31January 2006? Statement of profit or loss: Income of $27,000/$27,500 Statement of financial position: prepaid income/accrued income of $2,500/$5,000 On May 2010, Jonas paid a rent bill of $1,800 for the period to 30 April 2011 What is the expense in the Statement of profit or loss, and the entry in the Statement of financial position, for the year ended 30 November 2010? $750/$1,050/$1,800 expense in the Statement of profit or loss, and a prepayment/accrual of $750/$1,050/$Nil on the Statement of financial position At 31 October 2013 a business had machines with a cost of $120,000 and with accumulated depreciation of $25,000 On January 2014 they sold a machine for $10,000 This machine had originally cost $30,000 on April 2012 The business had a depreciation policy of charging straight-line depreciation at the rate of 20% per annum, on a monthly basis What is the depreciation expense for the year ended 31 October 2014? What is the purpose of charging depreciation in accounts? A- To ensure that funds are available for the eventual replacement of the asset B- To reduce the cost of the asset in the Statement of financial position to its estimated market value C- To replace the cost of the asset with its estimated replacement value D- To allocate the cost less residual value of a non-current asset over the accounting periods expected to benefit from its use A non-current asset was purchased at the beginning of year for $2,400 and depreciated by 20% per annum using the reducing balance method At the beginning of year it was sold for $1,200 (Choose the correct answers) The result of this was; 28.80/240.00 loss on disposal/profit on disposal sapp.edu.vn | SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn 10 According to IAS2 Inventories, which of the following costs should be included in valuing the inventories of a manufacturing company? (Tick all that apply) A- General administrative overheads B- Carriage inwards C- Depreciation of factory machines D- Carriage outwards 11 A business received a delivery of goods on 29 June 2013, which was included in inventory at 30 June 2013 The invoice for the goods was recorded in July 2013 What effect will this have had on the business? A- Inventory at 30 June will be understated B- Inventory at 30 June 2013 will be overstated C- Profit for the year ended 30 June 2013 will be overstated D- Profit for the year ended 30 June 2014 will be overstated 12 Apple has her own business selling dolls to stores At 30 June 2013 she has a balance on her trade receivables of 60,900 A balance of $2,000 due from X Co is considered irrecoverable and is to be written off Y Co was in financial difficulty and Apple wishes to provide an allowance for 60% of their balance of $1,600 She has also decided to make a general allowance for receivables of 10% of her remaining trade receivables What is the allowance for receivables in her Statement of financial position at 30 June 2013? 13 At 30 June 2005, a company’s allowance for receivables was $39,000 At 30 June 2006, trade receivables totaled $517,000 and it was decided to write of debts totaling $37,000 as irrecoverable It was also decided to adjust the allowance for receivables to 5% of the remaining trade receivables What expense should appear in the Statement of profit or loss for the year ended 30 June 2006? sapp.edu.vn | SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn 14 At July 2010, a company’s receivables amount $838,000 It was decided to write off $72,000 of these debts as irrecoverable and to adjust the allowance for receivables to $60,000 What are the final amounts for inclusion in the company’s statement of financial position at 30 June 2011? Receivables Less: Allowance for receivables Net amount 766,000/838,000 108,000/60,000 706,000/730,000/658,000/778,000 15 Which of the following statements are correct? (Tick all that apply) A- A company must disclose its significant accounting policies by way of a note to its financial statements B- A company’s statement of changes in equity must include the proceeds of any share issue during the period C- A company’s issued share capital must be included in its published Statement of financial position as part of shareholders’ funds D- If a company makes a bonus issue of ordinary shares, the total shareholders interest (share capital plus reserves) remains unchanged 16 Which of the following may appear as liabilities in a company’s statement of financial position? (Choose all that apply) A- Tax payable B- Allowance for receivables C- Loan due for repayment within one year D- Trade payables 17 On January 2013, the capital structure of Q, a limited liability company, was as follows: Share capital (1,000,000 ordinary shares of 50c each) $500,000 Share premium $300,000 On April 2013 the company made a rights issue of 200,000 50c shares at $1.30 each, and on July made a bonus issue of share for every in issue at that time, using the share premium account for this purpose What are the balances on the accounts after the bonus issue? (Choose the correct answers) Share capital account $875,000/$750,000 Share premium account $610,000/$285,000/$310,000/$230,000 sapp.edu.vn | SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn 18 Which of the following statement regarding the Statement of profit or loss for a limited company, is correct? Accounting standards define the expenses which are reported under ‘cost of sales’ ‘Depreciation’ appears as a separate heading Irrecoverable debts written off will be included under one of the statutory expense headings (usually administrative expenses) Interest payable is subtracted from the profit after taxation 19 Which of the following statements about bank reconciliations are correct? (1) In preparing a bank reconciliation, unpresented cheques must be deducted from a balance of cash at bank shown in the bank statement (2) A cheque from a customer paid into the bank but dishonoured must be correctly by making a debit entry in the cash book (3) An error by the bank must be corrected by an entry in the cash book (4) An overdraft is a debit balance in the bank statement A- and B- and C- and D- and 20 Which of the following accounts would be expected to have a debit balance at the end of the year? (Choose all that apply) A- Payables B- Capital C- Discounts allowed D- Purchases E- Sales F- Returns inwards 21 The cash account shows a balance of $$13,620 overdrawn at 30 September 2015 It is later discovered that a standing order for $300 has been entered twice, and that a dishonoured cheque for $1,080 has been debited in the cash account instead of credited What is the correct balance? A- $15,480 overdrawn B- $15,000 overdrawn C- $12,240 overdrawn D- $14,400 overdrawn sapp.edu.vn | SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn 22 Silver Co made sales of $193,200 during the year ended 31 August X1 Inventory decreased by $13,200 over the year and all sales were made at a mark up of 42% What was the cost of purchases during the year, to the nearest $1,000? A- $149,000 B- $123,000 C- $109,000 D- $136,000 23 The credit column of a trial balance is $1,200 more than the debit column Which of the following errors would fully account for the difference? A- No entries had been made for the purchase of goods costing $1,200 B- The debit side of the cash account had been over-added by $1,200 C- Cash sales of $600 had been correctly entered in the sales account, and credited to the cash account D- A payments of 1,200 for electricity had been correctly, and credited to the electricity account 24 Which of the following correctly describes the entry in the receivables account for a sale by a trader who is registered for sales tax? A- Credit with the total of sales made, including sales tax B- Debit with the total of sales made, excluding sales tax C- Credit with the total of sales made, excluding sales tax D- Debit with the total of sales made, including sales tax 25 Alison is not registered for sales tax purposes She has recently received an invoice for goods for resale which cost $500 before sales tax, which is charged at 15% The total cost was therefore $575 What is the correct entry to be made in Alison’s ledger in respect of this invoice? A- DR Purchases $575; CR Payables $575 B- DR Purchase $575; CR Sales tax $75; CR Payables $500 C- DR Purchases $500; CR Payables $500 D- DR Purchases $500; DR Sales tax $75; CR Payables $575 26 Which of the following material events after the reporting period and before the financial statements are approved are adjusting events? (Select all that apply) A- A customer owing $200,000 went bankrupt B- Some inventory valued in the statement of financial position at $300,000 was sold for $250,000 C- A factory with a value of $1,000,000 was destroyed by fire D- The company issued 2,000,000 ordinary shares sapp.edu.vn | SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn 27 What is the role of the International Financial Reporting Interpretations Committee? A- To issue guidance on the application of International Financial Reporting Standards B- To create a set of global accounting standards 28 Should details of material adjusting or material non-adjusting events after the Statement of Financial Position date be disclosed in the notes to financial statements according to IAS10 Events after the reporting period? A- Adjusting events B- Non-adjusting events 29 Which of the following statements are correct? (1) Materiality means that only items having a physical existence may be recognized as assets (2) The substance over form convention means that the legal form of a transaction must always be shown in financial statements even if this differs from the commercial effect (3) The money measurement concept is that only items capable of being measured in monetary terms can be recognized in financial statements A- only B- only C- only D- 1,2 and 30 The accounts of Lola plc for year ended 31 December 2010 include the following information: Revenue Gross profit Net profit Inventory Trade receivables Cash Trade payables 7,200 2,376 1,080 300 624 1,608 1,890 What is the current ratio? A- 1.18 B- 1.34 C- 0.75 D- 0.49 sapp.edu.vn | SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn 31 Part of a company’s Statement of cash flows is shown below: Operating profit 8,640 Depreciation charges (2,160) Proceed of sale of non-current assets 360 Increase in inventory (330) Increase in payables 440 Cash generated from operations 6,950 Which two of the following criticism of the above are valid? A- Proceeds of sale of non-current assets should not appear in this part of the Statement of cash flows B- Increase in payables should have been subtracted, not added C- Increase in inventory should have been added, not subtracted D- Depreciation charges should have been added, not subtracted 32 The accounts of Lola plc for year ended 31 December 2010 include the following information: Revenue 7,200 Gross profit 2,376 Net profit 1,080 Inventory 300 Trade receivables 624 Cash 1,608 Trade payables 1,890 What are the receivables days (to the nearest day)? A- 211 days B- 32 days C- 95 days D- 49 days sapp.edu.vn | 10 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn 33 On January 2009, X paid $21,600 to acquire 90% of the ordinary shares of y which was incorporated on that date At 31 December 2010 the statements of financial position of the each of the two companies were as follows X Y Non-current assets 70,000 36,000 Investment in Y, at cost 21,600 Current assets 27,000 15,000 118,600 51,000 Share capital - $1 shares Retained earnings Current liabilities 62,000 44,600 12,000 118,600 24,000 19,500 7,500 51,000 What amount should appear for goodwill in the consolidated statement of financial position? A- $21,600 B- $24,000 C- $ nil D- $19,500 34 On January 2009, X paid $21,600 to acquire 90% of the ordinary shares of y which was incorporated on that date At 31 December 2010 the statements of financial position of the each of the two companies were as follows X Y Non-current assets 70,000 36,000 Investment in Y, at cost 21,600 Current assets 27,000 15,000 118,600 51,000 Share capital - $1 shares Retained earnings Current liabilities 62,000 44,600 12,000 118,600 24,000 19,500 7,500 51,000 What amount should appear for retained earnings in the consolidated statement of financial position? A- $62,150 B- $64,100 C- $17,550 D- $44,600 sapp.edu.vn | 11 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn 35 On January 2009, X paid $21,600 to acquire 90% of the ordinary shares of y which was incorporated on that date At 31 December 2010 the statements of financial position of the each of the two companies were as follows X Y Non-current assets 70,000 36,000 Investment in Y, at cost 21,600 Current assets 27,000 15,000 118,600 51,000 Share capital - $1 shares Retained earnings Current liabilities 62,000 44,600 12,000 118,600 24,000 19,500 7,500 51,000 What amount should appear for non-controlling interest in the consolidated statement of financial position? A- $2,400 B- $1,950 C- $4,350 D- $21,900 sapp.edu.vn | 12 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn SECTION B – Two questions, both of which MUST be attempted Question I Alice bought 90% of the equity share capital of Bertha two years ago on July 2012, when the retained earnings of Bertha stood at $12,000 The Statements of financial position of both Alice and Bertha at 30 June 2014 Alice $‘000 Bertha $‘000 Non-current assets: Property, plant and equipment 240 72 Investment in Bertha, at cost 85 325 72 Current assets: Inventory Receivables Cash at bank Equity: Share capital Retained earnings Non-current liabilities Current liabilities 22 264 24 310 $635 48 60 12 120 $192 36 189 225 290 120 $635 12 72 84 70 38 $192 During the year Alice had transferred goods to Bertha for $45,000 – this figure includes a markup of 50% Two thirds of these goods remained in inventory at the year end The balance on the current account between Alice and Bertha was $53,000 at the year end The fair value of the non-controlling interest at the date of acquisition was $10,000 You are required to prepare a consolidated statement of financial position On this and the following pages, you will be required to answer several questions from your statement The marks available for each part will be shown on each page Question What is the amount of Goodwill on consolidation? $ (4 marks) Question What figure will appear for Retained earnings? $ (4 marks) 000 000 sapp.edu.vn | 13 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Question What figure will appear for Receivables? $ (1 mark) Tel: 096 972 94 63 Web: sapp.edu.vn 000 Question What amount will appear for Share capital? (1 mark) Question What amount will appear for Non-controlling interest? (4 marks) Question What is the value of inventory? $ (1 mark) 000 Question II The following financial statements of Downton plc for the year ended 31 December 2013 Statement of financial position as at 31 December 2013 2013 $’000 2012 $’000 Non-current assets 84,000 32,000 Current assets Inventory Receivables Cash 7,200 10,500 4,100 21,800 $105,800 11,400 9,200 2,600 23,200 $55,200 Equity Ordinary share capital Retained earnings Revaluation reserve 20,000 39,700 8,000 67,700 15,000 15,900 30,900 Non-current liabilities 22,100 14,000 8,400 7,600 $105,800 6,200 4,100 $55,200 Total assets Current liabilities Trade payables Taxation sapp.edu.vn | 14 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn Statement of profit or loss for the year ended 31 December 2013 $’000 Profit before tax Taxation Profit after tax 32,300 8,500 $23,800 The depreciation expense for the year was $8,200,000 No dividend was paid during the year You are required to prepare the Statement of cash flows for the year ended 31 December 2013 Question What figure will appear on the Statement in respect of tax paid? $ (2 marks) Question Complete the following (6 marks) Cash generated from operations: Profit before/after tax Add/Less Depreciation Add/Less Change in inventory Add/Less Change in receivables Add/Less Change in payables 8,200,000 4,200,000 1,300,000 2,200,000 Cash generated from operations Question (2 marks) What is the figure for ‘acquisition of non-current assets’ to appear in the Statement? Question (1 mark) Under which heading on the Statement of cash flows will ‘acquisition of non-current assets appear? Question (2 marks) Complete the following Cash flows from financing activities Issue of shares Loan sapp.edu.vn | 15 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn Question (2 marks) Choose the correct answers: In preparation of this Statement of cash flows, we have used the direct/ indirect method in arriving at the cash generated from operations Had we used the alternative method, we would have arrived at the same/different answer sapp.edu.vn | 16 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn KEYS FOR SOLUTIONS B Sole traders and companies both have capital invested in the business A The purpose of a SOFP is to show the assets of the business and the claims against those assets A The statement is true C 1,154,880 + 68,880 – 50,880 + 44,160 – 74,880 = $1,142,160 27,500/prepaid income/5,000 Expense Feb 2005 to 30 June 2005 (5 mths) 5/12 x 24,000 = 10,000 July 2005 to 31 January 2006 (7 mths): 7/12 x 30,000 = 17,500 Total expense = 10,000 + 17,500 = 27,500 1,050/prepayment/750 Expense From May 2010 to 30 November 2010 (7 mths): 7/12 x 1,800 = 1,050 Prepayment From December 2010 to 30 April 2011 (5 mths): 5/12 x 1,800 = 750 19,000 Deprecation from November 2013 to 31 December 2013 (2 mths) is: 2/12 x 20% x 120,000 = $4,000 Depreciation from January 2014 to 31 October 2014 (10 mths) is: 10/12 x 20% x (120,000 – 30,000) = $15,000 Total depreciation = 4,000 + 15,000 = $19,000 D The purpose of charging depreciation is to allocate the cost less residual value of a noncurrent asset over the accounting periods expected to benefit from its use 28.80/loss on disposal NBV at year end = 2,400 – (20% x 2,400) = 1,920 NBV at end year = 1,920 – (20% x 1,920) = 1,536 NBV at end year = 1,536 – (20% x 1,536) = 1,228.80 Loss on disposal = 1,228.80 – 1,200 = $28.80 sapp.edu.vn | 17 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn 10 B,C Carriage inwards and depreciation of factory machines should be included (Carriage outwards is a delivery cost; General admin overheads are an administrative cost) 11 C The goods were correctly included in inventory The invoice should also have been included Because it had not been, purchases have been understated and therefore profit overstated 12 6,890 Specific allowance = 60% x 1,600 = 960 General allowance = 10% x (62,900 – 1,600 – 2,000) = 5,930 Total allowance = 960 + 5,930 = 6,890 (We not have a general and a specific allowance on the same debt) 13 22,000 Allowance required at end of year: 5% x 517,000 - 37,000 = 24,000 Decrease in allowance = 39,000 -24,000 = 15,000 Expense for the year = 37,000 – 15,000 = 22,000 14 766,000/60,000/706,000 Receivables = 838,000 – 72,000 = 766,000 Allowance (per question) = 60,000 Net receivables = 766,000 – 60,000 = 706,000 15 All of the statement are correct 16 A,C,D All except the allowance from receivables (which is subtracted from the receivables balance) 17 750,000/310,000 The right issue is of 200,000 shares Share capital increases by 200,000 x $0.50 = $100,000 Share premium increases by 200,000 x $0.80 = $160,000 The bonus issue is of ¼ x 1,200,000 = 300,000 shares 18 C Irrecoverable debts written off will be included under one of the statutory expense headings (usually administrative expenses) is the only item that is correct 19 D Statements (1) and (4) are correct sapp.edu.vn | 18 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn 20 C,D,F Returns inwards; purchases; and discounts allowed would all be expected to have a debt balance 21 A 13,620 – 300 + (2 x 1,080) = $15,480 22 B COS = 100/142 x 193,200 = 136,056 Therefore purchases = 136,056 – 13,200 = $122,856 23 C The error that would fully account for the difference is if cash sales of $600 had been correctly entered in the sales account, and credited to the cash account 24 D Debit receivables (with the full amount, including sales tax) Credit sales (with the net amount, excluding sales tax) Credit sales tax (with the amount of the sales tax) 25 A Alison is not registered for sales tax and therefore the entry is Debit Purchases 575; Credit Payables 575 26 A,B The bankruptcy of the customer and the sale of inventory at a price lower than cost are both adjusting events The other two are non-adjusting events 27 A Their role í to issue guidance on the application of International Financial Standards 28 B Adjusting events should be adjusted for Non-adjusting events should be disclosed as notes 29 C Only statement is correct 30 B Current ratio = (300+624+1,608)/1,890 = 1.34 31 A, D sapp.edu.vn | 19 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn Depreciation charges should have been added, not subtracted Proceeds of sale of non-current assets should not appear in this part of the Statement of cash flows 32 B Receivables day = (624/7,200) x 365 days = 32 days 33 Cost of investment Fair value of non-controlling interest (10% x 24,000) 21,600 2,400 24,000 (Y was acquired on incorporation and so there were no retained earnings at that date) Share capital of Y 24,000 Goodwill = 24,000 – 24,000 = Nil 34 Retained earnings of X Post-acquisition earnings of Y (90%x19,500) 44,600 17,550 $62,150 35 Fair value @ date of acquisition (10% x 24,000) Share of post-acquisition earnings (10% x 19,500) 2,400 1,950 4,350 SECTION B – Two questions, both of which MUST be attempted Question I Question Consideration paid by Alice Fair value of non-controlling interest Share capital of Bertha Pre-acquisition retained earnings 85,000 10,000 95,000 12,000 12,000 24,000 Goodwill = 95,000 – 24,000 = $71,000 Question Retained earnings of Alice (189,000 – 10,000) 179,000 Alice’s share of post-acquisition earnings of Bertha 90% x (72,000 – 12,000) 54,000 sapp.edu.vn | 20 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn 233,000 (PURP = 50/150 x 2/3 x 45,000 = 10,000) Question Alice Bertha Less: Intra-group 264,000 60,000 (53,000) 271,000 Question Share capital of Alice $36,000 Question Fair value @ date of acquisition Share of post-acquisition earnings (10% x (72,000 -12,000) 10,000 6,000 16,000 Question Alice Bertha Less: PURP 22,000 48,000 70,000 (10,000) 60,000 Question II Question Own at start of year Charge for the year Still owing at end of year Paid during the year 4,100,000 8,500,000 (7,600,000) $5,000,000 Question Cash generated from operations: Profit before tax Add Depreciation Add Change in inventory 32,300,000 8,200,000 4,200,000 sapp.edu.vn | 21 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Less Change in receivables Add Change in payables 1,300,000 2,200,000 Cash generated from operations 45,600,000 Tel: 096 972 94 63 Web: sapp.edu.vn Question Closing balance 84,000,000 Opening balance (32,000,000) Depreciation charge 8,200,000 Revaluation surplus (8,000,000) Acquisitions $52,200,000) Question Cash generated from investing activities Question Cash flows from financing activities Issue of shares Loan + $5,000,000 + $8,100,000 Question In preparation of this Statement of cash flows, we have used the indirect method in arriving at the cash generated from operations Had we used the alternative method, we would have arrived at the same answer sapp.edu.vn | 22 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn sapp.edu.vn | 23 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp.edu.vn sapp.edu.vn | 24 ... same answer sapp. edu.vn | 22 SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp. edu.vn sapp. edu.vn | 23 SAPP. . .SAPP Academy Floor, No.2, Trai Ca alley, Truong Dinh street, Hanoi No.31, alley 56/34 Le Van Hien street, Hanoi Tel: 096 972 94 63 Web: sapp. edu.vn F3/ FFA Financial Accounting Mock Exam. .. Credit with the total of sales made, including sales tax B- Debit with the total of sales made, excluding sales tax C- Credit with the total of sales made, excluding sales tax D- Debit with the