Buildings should be depreciated like any other non-current asset so as to allocate their depreciable amount cost or valuation over their useful economic life... The depreciable amount of
Trang 1Answers
Trang 2Part 1 Examination – Paper 1.1(INT)
Section A
10 D
11 D
12 D
13 A
14 A
15 C
16 B
17 D
18 B
19 A
20 A
21 C
22 B
23 D
24 A
25 A
Workings for computational MCQs
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860
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Remaining inventory 220
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1,000 –––––
3 B 500 – (75% x 450)
6 D 180 + (40% x 500) – 30
7 B 838,000 – 72,000 = 766,000; allowance 60,000
14 A 3/4x 10,800 + 1/4x 12,000 = 11,100; prepayment 3/4x 12,000
17 D 20% x (1,000,000 + 400,000 + 5,600,000)
19
Trang 318 B 100 + 50 + 60; 80 – 50 + 30
22 B 1: (40,000 + 60,000 – 50,000) x 2 = 100,000 – 95,000 = 5,000 cash lost
3: (40,000 + 60,000 – 50,000 – 2,500 inventory loss) x 2 = 95,000
23 D 834,600 + 134,600 – 4,800 + 8,700 – 144,400
Purchase returns 41,200 Refunds received from
balances in receivables ledger 48,000
Trang 4Section B
Balance sheet as at 30 June 2006
Non-current assets
Current assets
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9,220 ––––––– 19,620 ––––––– Capital and reserves
––––––– 15,370 Non-current liabilities
Current liabilities
19,620 –––––––
Retained earnings balance
less: irrecoverable debts 280
5,570 –––––––
21
Trang 52 (a) Dr Cr
OR
Adjustments
102,000 ––––––––
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Trang 63 Joyce
Cash flow statement for the year ended 30 June 2006
Cash flows from operating activities
Adjustments for
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35,920
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Cash flows from investing activities
Purchase of property plant and equipment (Working 3) (19,000)
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Cash flows from financing activities
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WORKINGS
Closing balance 28,000
Opening balance 130,000
Closing balance 148,000
4 (a) Following the matching concept, to reflect in operating profit the cost of use of tangible non-current assets (the amount of
economic benefits consumed)
(b) It is not normally necessary to depreciate land, unless it is subject to depletion in some way – a quarry for example Buildings should be depreciated like any other non-current asset so as to allocate their depreciable amount (cost or valuation) over their useful economic life
23
Trang 7(c) (i) Straight line The depreciable amount of an asset, less any residual value, is written off in equal instalments over its
estimated useful economic life
(ii) Reducing balance Depreciation is calculated as a percentage of the net book value of the asset at the end of each period Other answers to (c) considered on their merits
5 (a) If the event provides evidence of conditions that existed at the balance sheet date, adjustment must be made, if material
Adjustment is also required if an event after the balance sheet date indicates that the going concern basis of accounting is
no longer appropriate
(b) (i) Non-current assets are normally valued at cost or valuation less depreciation If the going concern basis was no longer
appropriate, net realisable value on the basis of a short-term sale would have to be adopted instead, and the assets would be included in current assets
(ii) Inventory is normally valued at the lower of cost and net realisable value If the going concern basis no longer applied, net realisable value on the basis of a short-term sale would have to be substituted
(iii) Loan notes, if shown as non-current liabilities, would have to be reclassified as current liabilities.
Trang 8Part 1 Examination – Paper 1.1(INT)
Preparing Financial Statements (International Stream) December 2006 Marking Scheme
Land and building
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Plant and equipment
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131/2 max 11 –––––
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Calculation of non-current asset payment
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141/2 max 12 –––––
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25
Trang 95 (a) Conditions at b/s date 1 /2
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