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ACCA Exam Papers 2002
ACCA Exam Papers 2002
Section A
1
B
$400 debit which should have been credited correction will bring trial balance into agreement.
2
D
Rent Receivable
O/Balance
Income Statement
C/Balance
$
21,200
475,900
31,200
$
28,700
481,200
18,400
O/Balance
Cash
C/Balance
528,300
3.
528,300
$
69,040
3,000
4,800
20% $345,200
10/
12 20% $18,000
8/
12 20% $36,000
76,840
5
Sales
Opening inventory
Purchases
318,000
412,000
730,000
214,000
Shortfall
516,000
57,000
459,000
153,000
10 C
11 C
12 A
13 C
14 A
15 D
$
612,000
5c 10,000,000 + 8% $500,000
16 A
17 D
18 A
19 B
20 C
17
21 D
22 B
23 B
24 A
25 C
Section B
1
Cronos Limited
Income statement for the year ended 30 September 2002
$
Sales
Cost of sales (W1)
Gross profit
Distribution costs (W1)
Administrative expenses (W1)
$
3,210,000
(1,823,100)
1,386,900
(188,500)
(944,680)
(1,133,180)
253,720
(60,000)
193,720
Working 1
Opening inventory
Purchases
Carriage inwards
Carriage outwards (47,250 + 1,250)
Wages and salaries
694,200
5,800
700,000
Sundry administrative expenses
(381,000 + 13,600 4,900)
Bad and doubtful debts
(14,680 + 8,000 2,700)
Depreciation of office equipment
20% (214,000 40,000 + 48,000)
Loss on sale
Closing inventory
Cost of
Sales
$
186,400
1,748,200
38,100
Distribution
Costs
$
Administrative
Expenses
$
48,500
70,000
140,000
490,000
389,700
19,980
44,400
600
(219,600)
1,823,100
188,500
18
944,680
(a)
Journal entries
(1) Trial balance (no ledger entry)
Suspense account
Correction for carriage outwards balance omitted from trial balance
48,900
38,880
38,880
48,900
77,760
136,400
68,200
68,200
300,000
300,000
Correction of error in recording issue of shares $300,000 wrongly credited to ordinary share capital account.
Suspense Account
(b)
Difference
Discount accounts
$
386,400
136,400
522,800
$
48,900
77,760
396,140
522,800
Helios
Consolidated balance sheet as at 30 June 2002
Non-current assets
Goodwill
Tangible assets
$
68,800
770,000
838,800
390,000
1,228,800
Share capital
Share premium account
Accumulated profit
600,000
350,000
128,800
1,078,800
150,000
Minority interest
1,228,800
19
Cost of control
Investment in Luna
$
700,000
700,000
Balance
172,000
$
320,000
160,000
48,000
172,000
700,000
172,000
103,200
68,800
172,000
Minority interest
$
150,000
150,000
$
80,000
40,000
30,000
150,000
Accumulated profits
$
Cost of control
80% $60,000
Minority interest
20% $150,000
Cost of control
Goodwill amortisation
Balance for CBS
48,000
Helios
Luna
30,000
103,200
128,800
310,000
(a)
$
160,000
150,000
310,000
The values of the land and the buildings need to be separated, because the land would not normally require depreciation.
The revalued amount of the buildings should be depreciated over the estimated remaining useful economic life at the time of
the revaluation. The straight-line method is usually adopted, but other methods such as the reducing balance method may
be used.
(b)
Development costs should be amortised, using a method that reflects the pattern in which the economic benefits of the costs
are consumed by the enterprise. If this pattern cannot be determined reliably, the straight-line method should be used.
If the circumstances justifying the deferral of the expenditure cease to apply at any time, the expenditure should be written
off to the extent that it is no longer recoverable.
(c)
Investments of this kind do not depreciate, though they may fluctuate in value. Accordingly no depreciation is provided for
them.
(a)
IAS 10 Events after the Balance Sheet Date classifies this type of event as non-adjusting no change to the figures in the
financial statements is required but there should be a note to ensure that the financial statements are not misleading. The
note should state the amount of the loss and the extent of the insurance cover.
(b)
A provision should be made for the estimated amount of the liabilities under warranties, as required by IAS 37 Provisions,
Contingent Liabilities and Contingent Assets. The provision will appear as a liability in the balance sheet and the operating
profit will be reduced by the amount of the allowance.
(c)
This is an adjusting event according to IAS 10 Events after the Balance Sheet Date. The closing inventory should be reduced
by $40,000 in the balance sheet and in cost of sales, thus reducing operating profit by this amount, unless it could be shown
that the deterioration had taken place after the balance sheet date
(d)
The goods have to be treated as trading inventory at September 2002, applying generally accepted accounting principles.
The effect on the income statement and balance sheet will be:
(i)
(ii)
The combined effect of the two adjustments is to reduce current assets and profit by $20,000.
20
Sales revenue
Cost of sales
Distribution costs
Administrative expenses:
Wages and salaries
Sundry admin. expenses
Bad and doubtful debts
Depreciation
Loss on sale
5 1/2
2 1/2
21/2
1
1
1
11/2
11/2
1
6
91/2
1
2
Interest payable
Format
13
1/
2
1/
2
1/
2
Suspense account
Per entry
Final balance
1
11/2
2
21/2
31
11/2
3
1/
2
31/2
9
Maximum
Calculation of goodwill
Goodwill amortisation
4 1/2
3 1/2
2
1
2 1/2
31
1
3
1
1
1/
2
3
11/2
21/2
11
21
12
Available
4
(a)
(b)
(c)
(a)
(b)
(c)
(d)
Amortised
Basis of amortisation
Written off if no longer recoverable
1
1
1
1
1
Maximum
1
1
Non-adjusting event
Disclose by note
IAS 10 mentioned
Contents of note
1/
2
1/
2
1/
2
1/
2
Allowance required
IAS 37 mentioned
Effect on accounts
1/
2
1/
2
Adjusting event
IAS 10 mentioned
Effect on accounts
1/
2
1/
2
Description of adjustment
Generally accepted accounting principles
Adjustments to:
Sales
Receivables
Closing inventory
Effect on profit
1
1
1/
2
1/
2
1/
2
1/
2
4
10
22