4 a Research and development1 Oct 2003 expenditure Amortisation Research 30 Sept 2004 Project Q 1,000,000 Headings The amortisation of deferred development expenditure $100,000 and the r
Trang 1Answers
Trang 3Part 1 Examination – Paper 1.1 (INT)
Preparing Financial Statements (International Stream) December 2004 Answers
Section A
2 C 146,000 + 218,000 – 83,000
3 D (240,000 x 20%) + (160,000 x 20% x 6/12) – (60,000 x 20% x 9/12)
10 D
11 B
12 A
13 C (2 x 5,000) + ( 10 x 6,000)
14 C
15 B [2/3 x 1/2 x (540,000 + 30,000)] – 20,000 + (50% x 285,000)
16 A
17 D
18 B
19 D
20 A
21 B
22 B
23 C
24 B
25 C
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25
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Trang 4Section B
Income statement for the year ended 30 September 2004
to workings
Less: Cost of sales
Less: Opening inventory 138,000
Less: Purchases 2 410,800
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448,800
Less: less: Closing inventory 146,000 402,800
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(b) Calculation of goods taken by Bob:
Purchases per information in question:
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Workings
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2 Purchases and cost of sales
Details
Purchases (balancing figure) 410,800
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448,800
3 Expenses $89,400 + $4,100 – $3,900 + $4,600 + $2,400 – $2,600 94,000
–––––––– Alternative workings for (b)
Purchases and cost of sales (before deducting goods taken by Bob)
Purchases
Cost of sales
Calculation of goods taken by Bob
Cost of sales allowing for 50% mark-up $604,200 x 2/3 402,800
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Trang 52 (a) Cougar
Statement of changes in equity Year ended 30 June 2004 Share Share premium Revaluation Accumulated Total
Surplus on land
Consolidated balance sheet as at 30 June 2004
$
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$3,100,000 –––––––––––
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2,770,000
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$3,100,000 –––––––––––
Workings
Cost of control
Accumulated profits:
Accumulated profits:
Minority interest
Accumulated profits
Minority interest
Cost of control
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Trang 64 (a) Research and development
1 Oct 2003 expenditure Amortisation Research 30 Sept 2004
Project Q 1,000,000
Headings
The amortisation of deferred development expenditure ($100,000) and the research expenditure ($140,000) and the depreciation of the research equipment ($136,000) will appear in the income statement under cost of sales
The total deferred development expenditure ($1,350,000) will appear in the balance sheet under intangible non-current assets
(b) Disclosure notes
Income statement
The aggregate amount of research and development expenditure recognised as an expense during the period was $376,000, all charged in cost of sales
Balance sheet
Movements on deferred development expenditure during the year were:
Cost Amortisation Net book value
Year ended 30 September 2004
5 The use of historical cost accounting can mislead users when prices are rising in the following ways:
(i) Depreciation is based on the original cost of non-current assets and thus understates the true value obtained by the business from the use of these assets The result is that profit is overstated
(ii) Inventory is often valued at cost, using FIFO or average costs If prices are rising, sales in current terms are matched with cost of sales in historical cost terms Profit is again overstated
(iii) Balance sheet values of assets may become seriously below their current value
(iv) The combined effects of the above three factors mean that return on capital employed is overstated
(v) Year on year comparison of results is likely to be misleading as figures will show an automatic increase as prices rise, when
in real terms sales and profits may have risen far less, or even have fallen
Any four points needed for full marks
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Trang 7Part 1 Examination – Paper 1.1 (INT)
Preparing Financial Statements (International Stream) December 2004 Marking Scheme
Section B
Marks
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8 –––
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4 –––
12
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8
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Balance sheet
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41/2 –––
10
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Headings
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6 –––
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6 –––
12
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50
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