Integrated Accounting I (ACCA I) AK 2017-B

A sole trader fixes his prices to achieve a gross profit percentage on sales revenue of 40%. All his sales are for cash. He suspects that one of his sales assistants is stealing cash from sales revenue.

His trading account for the month of June 20X3 is as follows:

Recorded sales revenue $181,600

Cost of sales $114,000

Gross Profit $ 67,600

Assuming that the cost of sales figure is correct, how much cash could the sales assistant have taken ?

• $5,040

• $8,400

• $22,000

• It is not possible to calculate a figure from this information

Which of the following statements about the financial statements if limited liability companies are correct according to International Financial Reporting Standards ?

1 In preparing a statement of cash flows, either the direct or the indirect may be used. Both lead to the same figure for net cash from operating activities.

2 Loan notes can be classified as current

• 1, 2 and 3

• 2 and 4 only

• 3 and 4 only

• All four items

Fruitz Co has a tax liability relating to 20X1 brought forward in 20X2 of $16,000. This liability is finally agreed at $18,500, which is paid in 20X2 ? Fruitz’s accountant estimates their tax liability for profits earned in 20X2 will be $20,000.

What should the charge for taxation be in fruitz’s statements of profit or loss (SPL) for the year ended 31 December 20X2 ?

• $22,500

• $15,000

• $17,500

• $20,000

Which of the following should be disclosed in the note to the financial statements for tangible non-current assets ?

1 The market value of all assets classified as tangible non-current assets, whether they have been revalued or not

2 A reconciliation of the carrying amount of non-current assets at the beginning and end of the period

3 For revalued assets, the methods and significants assumptions applied in estimating the value

4 For revalued assests, the carrying amount of each class of assets that would have been included in the financial statements had the assets been carried at cost less depreciation.

• 1, 2 and 3 only

• 2 and 3 only

• 2, 3 and 4 only

• 2 only

In finalising the financial statements of a company for the year ended 30 June 20X4, which of the following material matters should be adjusted for ?

1 A customer who owed $180,000 at the end of the reporting period went bankrupt in July 20X4.

2 The sale in August 20X4 for $400,000 of some inventory items valued in the statements of financial position at $500,000.

3 A factory with a value of $3,000,000 was seriously damage by a fire in July 20X4. The factory was back in production by August 20X4 but its value was reduced to $2,000,000.

4 The company issued 1,000,000 ordinary shares in August 20X4.

• All four items

• 1 and 2 only

• 1 and 4 only

• 2 and 3 only

IAS 7 requires the statement of cash flows to open with the calculation of net cash from operating activities, arrived at by adjusting net profit before taxation.

Which one of the following lists consists only of items which could appear in such a calculation ?

• Depreciation, increase in receivables, decrease in payables, proceeds from sale of equipment, increase in inventories

• Increase in payables, decrease in inventories, profit on sale of plant, depreciation, decrease in receivables

• Increase in payables, proceeds from sale of equipment, depreciation, decrease in receivables, increase in inventory

• Depreciation, interest paid, proceeds from sale of equipment, decrease in inventories

Big Time Co had the following transactions during the year.

· Purchase from suppliers were $18,500, of which $2,550 was unpaid at the year end. Brought forwards payables were $1,000.

· Wages and salaries amounted to $9,500, of which $750 was unpaid at the year end. The financial statements for the previous year showed an accrual for wages and salaries of $1,500.

· Interest of $2,100 on a long term loan was pain in the year.

· Sales revenue was $33,400, including $900 receivables at the year end. Brought forward receivables were $400.

· Interest on cash deposits at the bank amounted to $175

Using the direct method, what is Big Time Co’s cash flow from operating activities ?

• $3,425

• $3,775

• $1,425

• $6,775

What amount should appear in the group’s consolidated statement of financial position at 31 December 20X2 for retained earnings ?

• $280,000

• $291,000

• $354,000

• $273,000

Micro Co acquired 90% of the $100,000 ordinary share capital of Minnie Co for $300,000 on 1 January 20X9 when the retained eranings of Minnie Co Were $156,000. At the date of acquisition the fair value of plant held by Minnie Co was $20,000 higher than its carrying amount. The fair value of the non-controlling interest at the date of acquisition was $75,000.

What is the goodwill arising on the acquisition of Minnie Co ?

• $119,000

• $99,000

• $139,000

• $24,000

From the following information regarding the year to 31 August 20X6, what is the accounts payable payment period ? you should calculate the ratio using purchases as the denominator.

Sales $43,000

Cost of Sales $32,500

Opening Inventory $6,000

Closing Inventory $3,800

Trade accounts payable at 31 August 20X6 $4,750

• 40 days

• 50 days

• 53 days

• 57 days