CTA LEVEL 1 FINANCIAL ACCOUNTING – 2017 FINAL EXAM PAPER 1: REQUIRED

QUESTION 1 MARKS

A Prepare a memorandum to the finance director of ZFruits and

advise on how the ZFruits group initially recognise and initially
measure the following, in terms of IFRS 3 Business
Combination:

• Client list; [7]

• Court case [9]
Logical Flow
[1]

B Prapare the “at acquisition” pro-forma journal entry in the

ZFruits group for the investment in Shuma Ltd. [12]

C Advise the management of ZFruits on the correct classification

of the investment in Roro in the financial statements of ZFruits [8]
as per IFRS 11.

Logical Flow [1]

D Prepare the journal entries to record the financial effects of
Roro in ZFruits financial statements. Assume that the [15]
investments in Roro should be classified as investment in a
joint operation as defined by IFRS 11.

Presentation [1]
E Calculate the carrying amount of investment in Damba in the
ZFruits group financial statements using the equity methods as [12]
per IAS 28.

QUESTION 2 MARKS
F Prepare the following notes to the financial statements of
Mukuyu Ltd for the year ended 29 December 2017:

• Income tax expense [31]

• Deferred tax [2]

Please note:
• The movement in temporary differences in the current
tax calculation must be calculated using the statement
of financial position method.
• Comparative figures are not required.
• Ignore any Value-Added Tax (VAT) implications.
• Round off all amounts to the nearest US$.

Your answer must comply with International Financial

Reporting Standards (IFRS).

Presentation [1]

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