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代写-UL19/0065
时间：2022-06-08
UL19/0065
Page 2 of 14
SECTION A
Answer any four questions from Section A
1. The statements of financial position for Hi Plc, Fi Ltd and Ti Ltd as at 31
December 2018 are given below:
Hi Plc Fi Ltd Ti Ltd
£ £ £
Non-current assets (land) 870,000 2,850,000 2,100,000
Investments 4,200,000 - -
Inventory 300,000 600,000 1,500,000
Trade receivables 750,000 1,050,000 240,000
Receivable from Fi Ltd 120,000 - 360,000
Receivable from Ti Ltd 240,000 - -
Cash 210,000 210,000 270,000
Total assets 6,690,000 4,710,000 4,470,000
Share capital 3,000,000 900,000 600,000
Retained earnings reserve 2,070,000 2,610,000 3,000,000
Trade payables 1,620,000 780,000 630,000
Payable to Hi - 120,000 240,000
8% Bonds - 300,000 -
Capital, reserves and liabilities 6,690,000 4,710,000 4,470,000
Hi Plc acquired 75% of Fi Ltd on 1 January 2015 for £2,505,000, gaining
significant influence over Fi Ltd. Fi Ltd's share capital and reserves were
£960,000 on 1 January 2015. The fair value of Fi Ltd’s non-current assets on 1
January 2015 was £3,630,000 and this revaluation has not been incorporated
into Fi Ltd’s accounts.
At the same time, Hi Plc acquired 10% of the bonds in Fi Ltd for £30,000. No
goodwill arose on this transaction.
UL19/0065
Page 3 of 14
Bond interest payable by Fi Ltd for 2018 is outstanding as at 31 December
2018. The bond interest payable by Fi Ltd and interest receivable by Hi Plc has
not been accounted for as at 31 December 2018.
Hi Plc acquired 40% of Ti Ltd on 1 January 2011 for £1,200,000, gaining partial
influence over Ti Ltd. Ti Ltd’s share capital and reserves were £900,000 on this
date.
Hi Plc’s policy is to capitalise goodwill. Impairment of 50% of all goodwill is
seen in 2018.
In 2018, Hi Plc’s inventory includes inventory acquired from Fi Ltd for £50,000
which had cost Fi Ltd £30,000 and inventory from Ti Ltd for £100,000 which
had cost Ti Ltd £10,000.
Required:
Prepare the consolidated statement of financial position for Hi Plc as at 31
December 2018.
(Total 20 marks)
UL19/0065
Page 4 of 14
2. On 1 January 2014, House Ltd acquired 70% of the ordinary shares of a
subsidiary, Flat Ltd for £500,000. Flat Ltd trades in the currency “rounds”. On
1 January 2014 the balance on the accumulated profits of Flat Ltd was
800,000 “rounds” and the share capital of Flat Ltd was 5,500,000 “rounds”.
The summary income statement and statement of financial position of Flat Ltd
are given as follows:
Statement of financial position as at 31 December 2018
Flat
“rounds”
Non-current assets 9,000,000
Inventories 375,000
Cash 1,525,000
Total assets 10,900,000
Share capital 5,500,000
Retained earnings 4,900,000
Liabilities 500,000
Equity and liabilities 10,900,000
The following information is also available:
1. Non-current assets were acquired on 1 January 2014.
2. Opening inventories were acquired on 30 November 2017 and closing
inventories were acquired on 29 December 2018.
3. The net profit for the year ended 31 December 2018 recorded in the
income statement was 750,000 “rounds”.
4. Exchange rates are given as follows:
1 January 2014 £1 = 20 “rounds”
30 November 2017 £1 = 10 “rounds”
1 January 2018 £1 = 12 “rounds”
Average for 2018 £1 = 8 “rounds”
29 December 2018 £1 = 4 “rounds”
31 December 2018 £1 = 6 “rounds”
5. The translated retained earnings reserve brought forward for Flat Ltd
is £191,670 under the closing rate method and £ 1,296,500 under the
temporal method.
UL19/0065
Page 5 of 14
Required
(a) Define functional currency and identify when the closing rate and
temporal translation methods should be used.
(5 marks)
(b) Translate the statement of financial position as at 31 December 2018
for Flat Ltd using the closing rate method.
(7 marks)
(c) Translate the statement of financial position as at 31 December 2018
for Flat Ltd using the temporal method.
(8 marks)
(Total 20 marks)
UL19/0065
Page 6 of 14
3. Flower Plc has the following projected information:
Year ended
31 December
Profit before
depreciation
Capital
allowances
Depreciation
2015 180,000 57,600 11,520
2016 172,800 11,520 46,080
2017 158,400 11,520 34,560
2018 144,000 80,640 23,040
The tax rate for Flower Plc is 35%. There is no deferred tax balance brought
forward as at 1 January 2015.
Required:
(a) What is deferred tax and what are permanent and temporary differences
when it comes to deferred tax?
(5 marks)
(b) Explain the three main approaches to accounting for deferred taxation.
(5 marks)
(c) Show the tax and deferred tax in the income statements and the deferred
tax in the statements of financial position for Flower Plc for the years 2015
to 2018 under the flow through method and the full provision method.
(10 marks)
(Total 20 marks)
UL19/0065
Page 7 of 14
4. A company acquired a machine as follows:
Manufacturer’s base price £25,000,000
Trade discount 20%
Early settlement discount taken on (base cost) 4%
Freight (carriage) charges £300,000
Installation cost £520,000
Staff training in use of machine £850,000
Pre-production testing £450,000
Purchase of 3 year maintenance contract per
annum
£200,000
Estimated residual value £500,000
Estimated life in machine hours
Hours used 15,000
– year ended 31 March 2016 3,000
– year ended 31 March 2017 3,600
– year ended 31 March 2018 1,500
On 1 April 2017, the machine was upgraded at a cost of £4,100,000 – increasing the
remaining life of the machine as at 31 March 2018 to 9,000 hours. The machine’s
estimated residual value was increased to £750,000.
Required:
(a) Define non-current assets and depreciation. Discuss three areas of
judgement in relation to depreciation within financial statements.
(8 marks)
(b) Show how the company would account for its machine for the years ended 31
March 2016, 2017 and 2018. Depreciation is based on machine hours used.
(12 marks)
(Total 20 marks)
UL19/0065
Page 8 of 14
5. Answer all parts of this question
You are given the following information in relation to Guitar Ltd and Banjo Ltd:
Guitar Ltd Banjo Ltd
Sales £19,500,000 £27,000,000
Gross profit margin 10% 15%
General expenses £450,000 £2,550,000
Tax £1,350,000 £900,000
Number of shares issued at start of the
period
150,000 150,000
Number of shares issued at full market
price for cash, half way through the period 90,000 60,000
Share price £30.00 £30.00
Required:
(a) Define and calculate the earnings per share and the price earnings ratio for
Guitar Ltd and Banjo Ltd. Discuss two limitations of ratio analysis.
(8 marks)
(b) Explain 5 different possible risks that may threaten compliance with the
International Federation of Accountants (IFAC) code for professional ethics.
( 5 marks)
(c) On 1 January 2017, Spoon Ltd receives £5,013,250 on the issue of 8%
debentures with a nominal value of £6,000,000. The debentures are
redeemable at the end of 2022 at par. The rate of interest implicit in the
debentures is 12%.
Required:
(i) What is a convertible financial instrument?
(ii) Show in tabular form how the debentures should be recorded in the
financial statements of Spoon Ltd from 2017 to 2022.
(7 marks)
(Total 20 marks)
UL19/0065
Page 9 of 14
6. Mint Limited promises a 60-year-old employee, Mrs Pear, who will retire at 65,
a lump-sum retirement package equal to 1% of final salary multiplied by the
number of years of service.
Mrs Pear’s 60th birthday is on 1 January 2015 and her 2015 yearly salary is
£75,000, to increase at 5% compound each year.
The discount rate is 10% per annum.
There is assumed to be a 20% probability that Mrs Pear will leave Mint
Limited before 1 January 2020.
On 1 January 2016, the company revises its actuarial assumptions, so that
Mrs Pear’s salary should increase by 15% per annum rather than 5% and the
probability of Mrs Pear leaving before her scheduled retirement falls to 10%.
The obligation is not funded.
Required:
(a) What are defined contribution and defined benefit plans?
(4 marks)
(b) Calculate the total pension cost that Mint Limited would recognise in the
profit and loss section of the income statement for the year 31 December
2016.
(11 marks)
(c) Calculate the actuarial loss for 2016 which would be recorded in other
comprehensive income.
(5 marks)
(Total 20 marks)
UL19/0065
Page 10 of 14
SECTION B
Answer any one question from Section B
7. Discuss three different methods of accounting for purchased goodwill. For
each method you state, describe the accounting adjustments needed on the
statement of financial position and the income statement. What are the key
arguments for and against each of the three methods you have chosen?
(Total 20 marks)
8. What is a conceptual framework in accounting? Critically assess the need
for a conceptual framework. Your answer should include a critical
assessment of the advantages and disadvantages associated with a
conceptual framework.
(Total 20 marks)
END OF PAPER
Page 2 of 14
SECTION A
Answer any four questions from Section A
1. The statements of financial position for Hi Plc, Fi Ltd and Ti Ltd as at 31
December 2018 are given below:
Hi Plc Fi Ltd Ti Ltd
£ £ £
Non-current assets (land) 870,000 2,850,000 2,100,000
Investments 4,200,000 - -
Inventory 300,000 600,000 1,500,000
Trade receivables 750,000 1,050,000 240,000
Receivable from Fi Ltd 120,000 - 360,000
Receivable from Ti Ltd 240,000 - -
Cash 210,000 210,000 270,000
Total assets 6,690,000 4,710,000 4,470,000
Share capital 3,000,000 900,000 600,000
Retained earnings reserve 2,070,000 2,610,000 3,000,000
Trade payables 1,620,000 780,000 630,000
Payable to Hi - 120,000 240,000
8% Bonds - 300,000 -
Capital, reserves and liabilities 6,690,000 4,710,000 4,470,000
Hi Plc acquired 75% of Fi Ltd on 1 January 2015 for £2,505,000, gaining
significant influence over Fi Ltd. Fi Ltd's share capital and reserves were
£960,000 on 1 January 2015. The fair value of Fi Ltd’s non-current assets on 1
January 2015 was £3,630,000 and this revaluation has not been incorporated
into Fi Ltd’s accounts.
At the same time, Hi Plc acquired 10% of the bonds in Fi Ltd for £30,000. No
goodwill arose on this transaction.
UL19/0065
Page 3 of 14
Bond interest payable by Fi Ltd for 2018 is outstanding as at 31 December
2018. The bond interest payable by Fi Ltd and interest receivable by Hi Plc has
not been accounted for as at 31 December 2018.
Hi Plc acquired 40% of Ti Ltd on 1 January 2011 for £1,200,000, gaining partial
influence over Ti Ltd. Ti Ltd’s share capital and reserves were £900,000 on this
date.
Hi Plc’s policy is to capitalise goodwill. Impairment of 50% of all goodwill is
seen in 2018.
In 2018, Hi Plc’s inventory includes inventory acquired from Fi Ltd for £50,000
which had cost Fi Ltd £30,000 and inventory from Ti Ltd for £100,000 which
had cost Ti Ltd £10,000.
Required:
Prepare the consolidated statement of financial position for Hi Plc as at 31
December 2018.
(Total 20 marks)
UL19/0065
Page 4 of 14
2. On 1 January 2014, House Ltd acquired 70% of the ordinary shares of a
subsidiary, Flat Ltd for £500,000. Flat Ltd trades in the currency “rounds”. On
1 January 2014 the balance on the accumulated profits of Flat Ltd was
800,000 “rounds” and the share capital of Flat Ltd was 5,500,000 “rounds”.
The summary income statement and statement of financial position of Flat Ltd
are given as follows:
Statement of financial position as at 31 December 2018
Flat
“rounds”
Non-current assets 9,000,000
Inventories 375,000
Cash 1,525,000
Total assets 10,900,000
Share capital 5,500,000
Retained earnings 4,900,000
Liabilities 500,000
Equity and liabilities 10,900,000
The following information is also available:
1. Non-current assets were acquired on 1 January 2014.
2. Opening inventories were acquired on 30 November 2017 and closing
inventories were acquired on 29 December 2018.
3. The net profit for the year ended 31 December 2018 recorded in the
income statement was 750,000 “rounds”.
4. Exchange rates are given as follows:
1 January 2014 £1 = 20 “rounds”
30 November 2017 £1 = 10 “rounds”
1 January 2018 £1 = 12 “rounds”
Average for 2018 £1 = 8 “rounds”
29 December 2018 £1 = 4 “rounds”
31 December 2018 £1 = 6 “rounds”
5. The translated retained earnings reserve brought forward for Flat Ltd
is £191,670 under the closing rate method and £ 1,296,500 under the
temporal method.
UL19/0065
Page 5 of 14
Required
(a) Define functional currency and identify when the closing rate and
temporal translation methods should be used.
(5 marks)
(b) Translate the statement of financial position as at 31 December 2018
for Flat Ltd using the closing rate method.
(7 marks)
(c) Translate the statement of financial position as at 31 December 2018
for Flat Ltd using the temporal method.
(8 marks)
(Total 20 marks)
UL19/0065
Page 6 of 14
3. Flower Plc has the following projected information:
Year ended
31 December
Profit before
depreciation
Capital
allowances
Depreciation
2015 180,000 57,600 11,520
2016 172,800 11,520 46,080
2017 158,400 11,520 34,560
2018 144,000 80,640 23,040
The tax rate for Flower Plc is 35%. There is no deferred tax balance brought
forward as at 1 January 2015.
Required:
(a) What is deferred tax and what are permanent and temporary differences
when it comes to deferred tax?
(5 marks)
(b) Explain the three main approaches to accounting for deferred taxation.
(5 marks)
(c) Show the tax and deferred tax in the income statements and the deferred
tax in the statements of financial position for Flower Plc for the years 2015
to 2018 under the flow through method and the full provision method.
(10 marks)
(Total 20 marks)
UL19/0065
Page 7 of 14
4. A company acquired a machine as follows:
Manufacturer’s base price £25,000,000
Trade discount 20%
Early settlement discount taken on (base cost) 4%
Freight (carriage) charges £300,000
Installation cost £520,000
Staff training in use of machine £850,000
Pre-production testing £450,000
Purchase of 3 year maintenance contract per
annum
£200,000
Estimated residual value £500,000
Estimated life in machine hours
Hours used 15,000
– year ended 31 March 2016 3,000
– year ended 31 March 2017 3,600
– year ended 31 March 2018 1,500
On 1 April 2017, the machine was upgraded at a cost of £4,100,000 – increasing the
remaining life of the machine as at 31 March 2018 to 9,000 hours. The machine’s
estimated residual value was increased to £750,000.
Required:
(a) Define non-current assets and depreciation. Discuss three areas of
judgement in relation to depreciation within financial statements.
(8 marks)
(b) Show how the company would account for its machine for the years ended 31
March 2016, 2017 and 2018. Depreciation is based on machine hours used.
(12 marks)
(Total 20 marks)
UL19/0065
Page 8 of 14
5. Answer all parts of this question
You are given the following information in relation to Guitar Ltd and Banjo Ltd:
Guitar Ltd Banjo Ltd
Sales £19,500,000 £27,000,000
Gross profit margin 10% 15%
General expenses £450,000 £2,550,000
Tax £1,350,000 £900,000
Number of shares issued at start of the
period
150,000 150,000
Number of shares issued at full market
price for cash, half way through the period 90,000 60,000
Share price £30.00 £30.00
Required:
(a) Define and calculate the earnings per share and the price earnings ratio for
Guitar Ltd and Banjo Ltd. Discuss two limitations of ratio analysis.
(8 marks)
(b) Explain 5 different possible risks that may threaten compliance with the
International Federation of Accountants (IFAC) code for professional ethics.
( 5 marks)
(c) On 1 January 2017, Spoon Ltd receives £5,013,250 on the issue of 8%
debentures with a nominal value of £6,000,000. The debentures are
redeemable at the end of 2022 at par. The rate of interest implicit in the
debentures is 12%.
Required:
(i) What is a convertible financial instrument?
(ii) Show in tabular form how the debentures should be recorded in the
financial statements of Spoon Ltd from 2017 to 2022.
(7 marks)
(Total 20 marks)
UL19/0065
Page 9 of 14
6. Mint Limited promises a 60-year-old employee, Mrs Pear, who will retire at 65,
a lump-sum retirement package equal to 1% of final salary multiplied by the
number of years of service.
Mrs Pear’s 60th birthday is on 1 January 2015 and her 2015 yearly salary is
£75,000, to increase at 5% compound each year.
The discount rate is 10% per annum.
There is assumed to be a 20% probability that Mrs Pear will leave Mint
Limited before 1 January 2020.
On 1 January 2016, the company revises its actuarial assumptions, so that
Mrs Pear’s salary should increase by 15% per annum rather than 5% and the
probability of Mrs Pear leaving before her scheduled retirement falls to 10%.
The obligation is not funded.
Required:
(a) What are defined contribution and defined benefit plans?
(4 marks)
(b) Calculate the total pension cost that Mint Limited would recognise in the
profit and loss section of the income statement for the year 31 December
2016.
(11 marks)
(c) Calculate the actuarial loss for 2016 which would be recorded in other
comprehensive income.
(5 marks)
(Total 20 marks)
UL19/0065
Page 10 of 14
SECTION B
Answer any one question from Section B
7. Discuss three different methods of accounting for purchased goodwill. For
each method you state, describe the accounting adjustments needed on the
statement of financial position and the income statement. What are the key
arguments for and against each of the three methods you have chosen?
(Total 20 marks)
8. What is a conceptual framework in accounting? Critically assess the need
for a conceptual framework. Your answer should include a critical
assessment of the advantages and disadvantages associated with a
conceptual framework.
(Total 20 marks)
END OF PAPER
