Câu 1 (2 marks):

White Cliffs Co (US company), whose year end is 31 December, buys some goods from Rinka SA of France
on 30 September 2016. The invoice value is €70,000 and is due for settlement in 31 January 2017. The
exchange rate moved as follows.
30 September $1 = 1.60 €
31 December $1 = 1.40 €
31 January $1 = 1.80 €
Required
State the accounting entries in the books of White Cliffs Co.

At 30, September
Dr inventory 43,750 (70,000x 1/1.6)
Cr Account Payable 43,750
At 31, December
Dr Exchange loss 6,250 ( 1x70,000/1.4 - 43,750)
Cr Account Payable 6,250
At 31, January
Dr Account Payable 50,000 (70,000x 1/1.4)
Cr Cash 38,889 (80,000x 1/1.6)
Cr Exchange Gain 11,111
Câu 2 (2 marks): PRESENTATION OF ITEMS IN THE FINANCIAL STATEMENTS
Consider the following items for Cooper Ltd at 30 June 2013:
(a) the effect on retained earnings of the correction of a prior period error
(b) revaluation gain on land (not reversing any previous revaluation)
(c) income tax expense
(d) allowance for doubtful debts
Required State whether each item is reported:
1. in the statement of financial position
(d) allowance for doubtful debts
2. in profit or loss in the statement of profit or loss and other comprehensive income
(c) income tax expense
3. in other comprehensive income in the statement of profit or loss and other comprehensive income
(b) revaluation gain on land (not reversing any previous revaluation)
4. in the statement of changes in equity
(a) the effect on retained earnings of the correction of a prior period error
Câu 3 (2đ): Identify the following events which are adjusting events or non-adjusting events. Prepare any
necessary entries to adjust.
1. Bankruptcy of a debtor after the end of the reporting period that confirms that a loss existed at the end of
the reporting period on trade receivables.
- Adjusting events
Dr Bad debt expense
Cr Accounts receivable
2. Sales of inventories at less than cost
- Adjusting events
Dr COGS
Cr Inventory
3. Announcing a plan to discontinue on operation.
- Non adjusting events
4. Rights issue of equity shares.
- Non adjusting events
Câu 4 (1đ): On Dec 31, 13, A Ltd acquired a building with $20,000. The company depreciated the building on
a straight-line basis, with an estimated useful life of 10 years and residual value of $2,000. On Dec 31, 15, the
manager reconsider the residual value and change it into $3000.
Required
Prepare any necessary entries in A’s financial statements as at Dec 31, 15.

31/12/2014
Dr Depreciation expense 1,800 [(20,000 – 2,000) / 10 years]
Cr Accumulate depreciation 1,800
31/12/2015
Dr Depreciation expense 1,689 [(18,200 – 3,000) / 9 years]
Cr Accumulate depreciation 1,689
Câu 5 (3đ)
A Ltd acquired a 30% interest in B Ltd for $80,000 on 1 January 2015. The equity of B Ltd at the acquisition
date was:
Share capital $ 80 000
Retained earnings 120 000
All the identifiable assets and liabilities of B Ltd were recorded at fair value. Profits and dividends for the
years ended 31 Dec 2015 to 2016 were as follows:
Profit Before tax Dividens paid Asset Revaluation
Profit before tax Devidens paid Asset revaluation
2015 ($90,000) $ 40,000
2016 $ 50,000 $ 70,000
Notes: Income tax rate is 30%. In 2016, B Ltd transferred $5,000 to general reserve.
Prepare journal entries in the records of A Ltd for each of the years ended 31 Dec 2015 to 2016 in relation to
its investment in the associate/joint venture, B Ltd.

1 Jan 2015:
- Net fair value of identifiable assets and liabilities 200,000
- Net fair value acquired 60,000 (30% x 200,000)
- Cost of investment 80,000
- Good will 20,000 (80,000 – 60,000)

Dr Investment in associates and joint ventures 80,000

Cr Cash 80,000
31 Dec 2015 :
Profit or loss
Dr Investment in associates and joint ventures 27,000 (90,000 x 30%)
Cr Share of profit or loss os associates 27,000
Asset revaluation
Dr Investment in associates and joint ventures 12,000 (40,000 x30%)
Cr Share of other comprehensive income of assocites and joint ventures 12,000
Dr Share of other comprehensive income of assocites and joint ventures 12,000
Cr asset revaluation surplus 12,000
31 Dec 2016:
Profit or loss
Dr Investment in associates and joint ventures 15,000 (50,000 x 30%)
Cr Share of profit or loss os associates 15,000
Devidens paid
Dr Cash 4,500 (70,000 x 30%)
Cr Investment in associates and joint ventures 4,500