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F7 Mock Exam Questions

F7 Mock Exam Questions

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Published by: sweeto2012 on Feb 18, 2010
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01/31/2013

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F7 Mock Exam Questions
Question 1
Hyflux Ltd acquired 2.4 million shares of Sunny Ltd on 1 Oct 2009, by issuing two of its own sharesfor every three shares in Sunny Ltd and a deferred payment of $1.00 for every eight Sunny Ltd sharespayable on 1 Oct 20011. Hyflux Ltd’s share was trading at a market price of $2.00 on 1 Oct 2009; thepresent value of the cash consideration is equal to $0.80 at a discount rate of 12% per annum. Thedeferred cash consideration has not been recorded as part of the investment.The following profit statements have been prepared for Hyflux Ltd and Sunny Ltd for the year ended31 Dec 2009.Hyflux Ltd Sunny Ltd$‘000 $‘000Sales 700 300Cost of sales (306) (188)____ ____Gross profit 394 112Operating expenses (27) (20)Finance costs (15) (12)____ ____Profit before tax 352 80Taxation (92) (24)_____ _____Profit after tax 260 56Dividends (100) 0_____ _____Retained profit for the year 160 56______ _____Balance SheetAs at 31 Dec 2009Hyflux Ltd Sunny Ltd$‘000 $‘000 $‘000 $‘000AssetsNon Current AssetsProperty, plant and equipment 3,100 3,000Investments 3,300 30____ ____6,400 3,030Current assetsStock 1,200 500Debtors 1,300 240Bank and cash 800 105____ ____Total assets 9,700 3,875____ ____
 
F7 Mock Exam Questions
Equity and liabilitiesEquity shares 6,000 3,000Accumulated profits 620 340______ _____6,620 3,340Non current liabilities10% loan 2,000 300Current liabilitiesCreditors 980 235Dividend payable 100 0_____ _____Total equity and liabilities 9,700 3,875______ ______Notesi) Hyflux Ltd made sales of $30,000 to Sunny Ltd during the year. These goods originally costHyflux Ltd $20,000.Only 50% of these goods had been resold by Sunny Ltd by 31 Dec 2009.ii) Inter company balance were:Owed to Sunny in Hyflux’s book 30Receivable from Hyflux in Sunny’s book 50The difference is due to a cash in transit, not yet received by Sunny Ltdiii) The fair value of a plant in Sunny Ltd was $160,000 higher than the book value at the date of acquisition, it has a four years remaining life with straight line depreciation.iv) It is estimated that the consolidated goodwill is valued at $600,000 on 31 Dec 2009 followingthe FRS 103 requirement.v) There are currently 3 million shares in Sunny Ltd.
Required
a) Prepare a consolidated Income Statement for Hyflux Ltd for the year ended 31 Dec 2009.(11 marks)b) Prepare a consolidated statement of financial position for Hyflux Ltd as at 31 Dec 2009.(14 marks)
 
F7 Mock Exam Questions
Question 2
The trial balance of Baka Ltd, a publicly listed company, at 31 March 2009 is as follows:$000 $000Investment property 2,000Building 8,000Plant and equipment at cost 3,250Accumulated depreciation 1 April 2008- building 3,200- plant 2,200Accumulated profits 1 April 2008 3,050Sales revenues 27,080Purchases 17,000Construction contract costs to 31 March 2008 1,600Construction contract progress billings received 1,500Trade Debtors 7,520Inventory 1,700Cash in bank 3,17010% preference share 1,200Trade creditors 3,340Equity shares 4,0006% Loan Note (issued in 2006) 2,000Property rental 110Distribution cost 340Interim dividend 2,000Administration expenses 1,000Loan interest paid 100_______ ______47,680 47,680_______ ______The following notes are relevant:i) On 31 March 2009, the company’s only remaining building was revalued at $6 million. Thebuilding had an estimated life of 25 years when it was acquired on 1 April 1998 and this hasnot changed as a result of the revaluation. The directors of Angelo wish to incorporate thisvalue in the financial statements for the year ended 31 March 2009.Plant is depreciated at 20% per annum on net book value.ii) The investment property was revaluated at $1.7 million on 31 Mar 2009.iii) Included in the sales revenue is an amount of $1 million relating to sales made under a sales orreturn basis. These goods were subsequently returned in good condition after 31 Mar 2009.These goods were sold at a mark up of 25%.

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