Question Tag: Financial Position

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 1 Marks

AAA – Nov 2012 – L3 – AII – Q1 – Overview of Advanced Audit and Assurance.

Defines assets in the context of financial position.

In the financial position of a company, ……………….. are resources arising from past events and for which future economic benefits are derivable.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2012 – L3 – AII – Q1 – Overview of Advanced Audit and Assurance."

  • 25 Marks

CR – Nov 2016 – L3 – Q1a – Consolidated Financial Statements (IFRS 10)

Prepare consolidated financial statements for Bata Plc and subsidiaries including goodwill, NCI, and intra-group adjustments.

Bata Plc, which operates in the manufacturing sector, has been surviving the challenges operating in the Nigerian economic environment. The draft Statements of Financial Position of Bata Plc and its subsidiaries as at October 31, 2016 are as follows:

The following information is relevant to the preparation of the group financial statements:

  1. Acquisition Dates: Bata Plc acquired 60% of the share capital of Jewe Plc on November 1, 2012, and 10% of Gaba Plc on November 1, 2013, at costs of N852 million and N258 million, respectively. Jewe Plc acquired 70% of Gaba’s share capital on November 1, 2013.
  2. Retained Earnings at Acquisition:

  • Fair Values at Acquisition: The fair values of Jewe and Gaba’s net assets were N930 million and N660 million, respectively, including non-depreciable land. The fair value of non-controlling interest (NCI) was N390 million for Jewe and N330 million for Gaba. Bata Plc adopts the full goodwill method under IFRS 3.
  • Impairment: Impairment testing shows Jewe suffered a loss of N60 million, but Gaba had no impairment.
  • Intra-group Sales: Bata sold inventory to Jewe and Gaba for N480 million and N360 million, respectively, invoicing with a 25% markup on cost. At year-end, half of Jewe’s inventory remains unsold, while Gaba sold its entire stock to third parties.
  • Deep Discount Bond: Bata purchased a bond for N500 million with a redemption value of N740.75 million in three years. The bond’s effective interest rate is estimated at 14%. The Accountant has not yet recorded amortized cost for this financial asset.

Required: Prepare a Consolidated Statement of Financial Position for Bata Plc and its subsidiaries as at October 31, 2016.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – Nov 2016 – L3 – Q1a – Consolidated Financial Statements (IFRS 10)"

  • 15 Marks

FM – Nov 2021 – L3 – Q7 – Financing Decisions and Capital Markets

Analyze the effects of a 1-for-5 rights issue for James Obasi plc, calculate theoretical ex-rights price, and assess investor options and impacts.

James Obasi plc, a medium-sized drone manufacturing firm, is considering a 1-for-5 rights issue at a 15% discount to the current market price of N4.00 per share. Expected issue costs are N2 million, payable from the funds raised. The proceeds from the rights issue will be used to redeem some of the company’s existing bonds at par.

Financial Information:

Statement of Financial Position (N’000):

Required:

a. Ignoring issue costs and any use of the funds raised by the rights issue, calculate: i. The theoretical ex-rights price per share. ii. The value of rights per existing share. (4 Marks)

b. Identify the alternative actions available to an owner of 1,500 shares in James Obasi plc concerning the rights issue and determine the effect of each action on the investor’s wealth. (6 Marks)

c. Calculate the current earnings per share and the revised earnings per share if the rights issue funds are used to redeem some of the existing bonds.
(5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FM – Nov 2021 – L3 – Q7 – Financing Decisions and Capital Markets"

  • 30 Marks

CR – Nov 2021 – L3 – Q1 – Consolidated Financial Statements (IFRS 10)

Prepare consolidated financial position of Makoko Group for the year ended Dec 31, 2021, and discuss accounting implications of significant influence.

Makoko Intercontinental Holdings Limited is a global merchant of cash crops. A policy of strategic acquisitions over the years has placed the company in a position to source for export products competitively. The lockdown arising from the recent pandemic posed a significant challenge for the export of their products throughout the year 2020. At a board meeting to review the performance of the company for that year and discuss the impact of the pandemic, the Managing Director noted the significant drop in the general performance indices. In order to get a greater market presence and higher demand locally, the board decided to acquire the following investments on January 1, 2021:

  • 60% of the equity share of Ojodu Limited;
  • 50% of 10% loan notes of Ojodu Ltd at par;
  • 40% stake in the ordinary shares of Egbeda Confectioneries Limited.

In the opinion of the board, both Ojodu Limited and Egbeda Confectioneries Limited are the biggest local customers of Makoko Intercontinental Holdings Limited and a control through shareholding would give the investing company greater stake in the operational decisions of the investee companies. Importantly, it would also boost revenue by allowing unrestricted access to local markets. It is believed that this will forestall any adverse impact of further lockdowns that may hinder export sales in the future.

The draft financial statements of the companies for the year are as follows:

Statements of financial position as at December 31, 2021

Additional Information:

  1. Makoko Limited paid N90 million for the acquisition of Ojodu Limited when the retained earnings of Ojodu Limited were N13 million.
  2. The fair value of Ojodu’s freehold property was N6.5 million higher than the carrying amount as at the date of acquisition. This valuation has not been reflected in the books of Ojodu Limited.
  3. Makoko Limited paid N41 million for the shareholding in Egbeda Limited when the retained earnings of Egbeda Limited were N12 million.
  4. An impairment test as at December 31, 2021 showed that goodwill was impaired by N3.5 million and the investment in Egbeda Limited was impaired by N0.8 million.
  5. During the year, Makoko Limited sold products to Egbeda Limited at a price of N8 million. These goods had cost Makoko Limited N5 million. Half of the goods were still in the inventory of Egbeda Limited as at December 31, 2021.
  6. The companies issued share capital has not changed since the date of acquisition.
  7. No dividends were paid during the year.
  8. Non-controlling interests in subsidiaries are to be measured at the appropriate proportion of the subsidiary’s identifiable net assets.

Required: a. Prepare the consolidated statement of financial position for the Makoko Group for the year ended December 31, 2021. (20 Marks)

b. The Directors of Makoko Intercontinental Holdings Limited are concerned about getting significant influence, if not absolute control, of all entities they intend to buy into. The five-year strategic plan of the company (2020 – 2024) focuses on having control of the cash crops segment of the agribusiness sector of the economy. This is in order to make them ready to roll out the next developmental phase of the business, which is to migrate from exporting raw products to finished products for industrial and household use.

Towards this goal, the board requires the Group Accountant to make a presentation on the accounting implications of gaining significant influence in another entity.

Required: Discuss the issues involved in the requirements of the Board as specified above. (5 Marks)

c. A friend to the Chief Accountant of Makoko Intercontinental Holdings Limited, who is a consultant to Ojodu Limited and Egbeda Confectionaries Limited, is requesting for information on the new acquisitions from his friend, the Chief Accountant.

Required: Identify the ethical issues involved in the above scenarios and their implications. (5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – Nov 2021 – L3 – Q1 – Consolidated Financial Statements (IFRS 10)"

  • 30 Marks

CR – Nov 2020 – L3 – Q1 – Consolidated Financial Statements (IFRS 10)

Prepare consolidated profit or loss, financial position, cash flow benefits explanation, and share disposal accounting for a group structure.

Statements of financial position as at December 31, 2019

Statement of profit or loss for the year ended December 31, 2019

Statement of changes in equity (extract) for the year ended December 31,
2019

Additional Information:

  1. Haba owns 80% of Suka‘s shares, purchased in 2016 for N20.5 million cash, when Suka’s retained earnings balance was N7 million.
  2. In 2014, Haba purchased 60% of Zara‘s shares by issuing shares with a nominal value of ₦6.5 million at a premium of N6.5 million. At acquisition, Zara‘s retained earnings were N3 million, and the fair value of net assets was N24 million. Any undervaluation was attributed to land still held as of December 31, 2019.
  3. Inventory at December 31, 2019, includes goods Zara and Suka purchased from Haba valued at ₦5.2 million and N3.9 million, respectively. Haba aims for a 30% profit margin on cost. Total sales from Haba to Zara and Suka were N8 million and N6 million, respectively.
  4. Haba and Suka each proposed dividends before year-end of N2 million and N2.5 million, respectively. These have not been accounted for yet.
  5. Haba conducted annual impairment tests on goodwill per IFRS 3 and IAS 36. The estimated recoverable amount of goodwill was N5 million in 2016 and N4.5 million in 2019.

Requirements:

a. Prepare the consolidated statement of profit or loss for the year ended December 31, 2019.
(10 Marks)

b. Prepare the consolidated statement of financial position as at December 31, 2019.
(10 Marks)

c. Explain the benefits to external users of including a statement of group cash flows in the annual report.
(10 Marks)

d. At December 31, 2019, Hard plc owned 90% of Spark Limited’s shares. The net assets of Spark in Hard Group’s consolidated financial statements amounted to N800 million, with no asset revaluation.

On January 1, 2020, Hard sold 80% of its Spark equity for N960 million cash, and the fair value of Hard’s remaining Spark shares is N100 million.

Required: Explain how the Spark share disposal should be accounted for in Hard Group’s consolidated financial statements.
(10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – Nov 2020 – L3 – Q1 – Consolidated Financial Statements (IFRS 10)"

  • 20 Marks

CR – May 2024 – L3 – SB – Q2 -Consolidated Financial Statements (IFRS 10)

Memo advising on acquisition decision based on financial analysis of Betta and Gamma Ltd.

Alpha PLC is an entity which has grown in recent years by acquiring established businesses. Alpha PLC is contemplating acquiring Betta Limited and Gamma Limited, both operating in the same industry as Alpha PLC. The management of Alpha PLC has indicated a total acquisition price of N12 million for each company. The following financial statements provide insight into the performance and financial position of both Betta Limited and Gamma Limited as at September 30, 2020:

  1. Statement of Profit or Loss (for the year ended September 30, 2020):
    Betta Ltd (N’000) Gamma Ltd (N’000)
    Revenue 25,000 40,000
    Cost of sales (19,000) (32,800)
    Gross profit 6,000 7,200
    Distribution costs (800) (1,400)
    Administrative expenses (450) (900)
    Finance costs (250) (900)
    Profit before tax 4,500 4,000
    Income tax expense (900) (1,000)
    Profit for the year 3,600 3,000
  2. Statement of Financial Position (as at September 30, 2020):
    Betta Ltd (N’000) Gamma Ltd (N’000)
    Non-current assets
    Property, plant and equipment
    – Property – 3,000
    – Owned plant and equipment 4,800 2,000
    – Leased plant and equipment – 5,300
    Total non-current assets 4,800 10,300
    Current assets
    Cash at bank and in hand 1,600 200
    Trade receivables 1,600 5,100
    Inventories 1,600 3,400
    Total current assets 4,800 8,700
    Total assets 9,600 19,000
    Equity and liabilities
    Ordinary shares (N1.00 each) 1,000 2,000
    Revaluation surplus on property – 900
    Retained earnings 1,600 2,700
    Total equity 2,600 5,600
    Non-current liabilities
    Finance lease obligation – 4,200
    5% loan notes (Dec 2026) 5,000 –
    10% loan notes (Dec 2026) – 5,000
    Total non-current liabilities 5,000 9,200
    Current liabilities
    Trade payables 1,250 2,100
    Finance lease obligation – 1,000
    Tax payable 750 1,100
    Total current liabilities 2,000 4,200
    Total equity and liabilities 9,600 19,000
  3. Additional Ratios Calculated:
    • Gross profit margin: Betta 24.0%, Gamma 18.0%
    • Profit margin (before interest and tax): Betta 19.0%, Gamma 12.3%
    • Return on capital employed (ROCE): Betta 62.5%, Gamma 31.0%
    • Current ratio: Betta 2.4:1, Gamma 2.1:1
    • Acid test ratio: Betta 1.6:1, Gamma 1.26:1
    • Net assets turnover: Betta 3.3 times, Gamma 2.5 times
    • Gearing: Betta 65.8%, Gamma 64.6%

Required:

a. Write a memo to the Director of Alpha PLC advising him on how to make the investment decision considering the performance and financial position of Betta Limited and Gamma Limited for the year ended September 30, 2020. (14 Marks)

b. What other qualitative factors should the management of Alpha PLC take into consideration assuming Gamma Limited is a foreign subsidiary? (6 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – May 2024 – L3 – SB – Q2 -Consolidated Financial Statements (IFRS 10)"

  • 30 Marks

CR – May 2018 – L3 – SA – Q1 – Consolidated Financial Statements (IFRS 10)

repare consolidated financial statements for Komolafe Group including profit or loss and statement of financial position for year-end 2016.

Komolafe Group carries on business as a distributor of warehouse equipment and importer of fruit into the country. Komolafe was incorporated in 2008 to distribute warehouse equipment. It diversified its activities during the year 2010 to include the import and distribution of fruit, and expanded its operations by the acquisition of shares in Kelvins in 2012 and Kelly in 2014.

Accounts for all companies are made up to December 31.

The draft statements of profit or loss and other comprehensive income for Komolafe, Kelvins, and Kelly for the year ended December 31, 2016 are as follows:

Komolafe Kelvins Kelly
Revenue 91,200 49,400 45,600
Cost of sales (36,100) (10,926) (10,640)
Gross profit 55,100 38,474 34,960
Distribution costs (6,650) (4,274) (3,800)
Administrative expenses (6,950) (1,900) (3,800)
Finance costs (650) – –
Profit before tax 40,850 32,300 27,360
Income tax expense (16,600) (10,780) (8,482)
Profit for the year 24,250 21,520 18,878
Other comprehensive income for the year:
Items that will not be reclassified to profit or loss in subsequent period
Revaluation of property 400 200 –
Total Comprehensive Income 24,650 21,720 18,878

The draft statement of financial position as at December 31, 2016, is as follows:

Komolafe Kelvins Kelly
Non-current assets
Property, plant, and equipment (carrying amount) 70,966 48,546 26,126
Investments
Shares in Kelvins 13,300 – –
Shares in Kelly – 7,600 –
Total Non-current assets 84,266 56,146 26,126
Current assets 3,136 18,050 17,766
Total assets 87,402 74,196 43,892
Equity
Ordinary shares 16,000 6,000 4,000
Retained earnings 45,276 48,150 39,796
Current liabilities 26,126 20,046 96
Total equity and liabilities 87,402 74,196 43,892

The following information is available relating to Komolafe, Kelvins, and Kelly:

  1. On January 1, 2012, Komolafe acquired 5,400,000 N1 ordinary shares in Kelvins for N13,300,000, at which date there was a credit balance on the retained earnings of Kelvins of N2,850,000. No shares have been issued by Kelvin since Komolafe acquired its interest.
  2. At the date of acquisition, the fair value of the identifiable net assets of Kelvins was N10 million. The excess of the fair value of net assets is due to an increase in the value of non-depreciable land.
  3. On January 1, 2014, Kelvins acquired 3,200,000 N1 ordinary shares in Kelly for N7,600,000, at which date there was a credit balance on the retained earnings of Kelly of N1,900,000. No shares have been issued by Kelly since Kelvins acquired its interest. The fair value of the identifiable net assets of Kelly at the date of acquisition approximates their book values.
  4. During 2016, Kelly made intra-group sales to Kelvins of N960,000, making a profit of 25% on cost. N150,000 of these goods were in inventories at December 31, 2016.
  5. During 2016, Kelvins made intra-group sales to Komolafe of N520,000, making a profit of 25% on sales. N120,000 of these goods were in inventories at December 31, 2016.
  6. An impairment test conducted at the year-end did not reveal any impairment losses.
  7. It is the group’s policy to value the non-controlling interest at fair value at the date of acquisition. The fair value of the non-controlling interests in Kelvins on January 1, 2012, was N1,000,000. The fair value of the 28% non-controlling interest (direct and indirect) in Kelly on January 1, 2014, was N1,800,000.

Required:
Prepare for Komolafe Group:

a. A consolidated statement of profit or loss and other comprehensive income for the year ended December 31, 2016. (13 Marks)

b. A consolidated statement of financial position as at December 31, 2016. (12 Marks)

c. In business combination, the consideration given by the acquirer to gain control of the acquiree can be in different forms, including deferred and contingent considerations. While deferred and contingent considerations represent amounts of consideration to be transferred in the future, the two differ in nature and form.

Required:
Briefly distinguish between deferred and contingent consideration. (5 Marks)

Total: 30 Marks

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – May 2018 – L3 – SA – Q1 – Consolidated Financial Statements (IFRS 10)"

  • 30 Marks

AAA – Nov 2023 – L3 – SA – Q1 – Audit of Complex Entities

Prepare the consolidated statement of financial position for Sports PLC Group as of September 30, 2020, with adjustments for subsidiaries, non-controlling interests, goodwill, and investments.

BP Fashion Limited is trading and expanding in the fashion industry. Over the years, the company has been audited by LMP Professional Services. The company is considering going to the stock market to raise funds through an increase in its issued share capital for the purpose of expansion into new markets.

The summarised two-year financial statements and the nine (9) months accounts of the company are given below:

BP Fashion Limited

Summarised Income Statement For the Years Ended December 31,

2019 2020 2021 (9 months)
Revenue ₦2,952m ₦3,510m ₦4,139m
Cost of sales (₦1,402m) (₦1,671m) (₦1,987m)
Gross profit ₦1,550m ₦1,839m ₦2,152m
Other income ₦15m ₦21m ₦25m
Operating costs:
– Employee costs (₦390m) (₦460m) (₦538m)
– Occupancy costs (₦262m) (₦312m) (₦373m)
– Other operating costs (₦278m) (₦326m) (₦389m)
Earnings before interests, taxes, depreciation and amortisation (EBITDA) ₦635m ₦762m ₦877m

 

Summarised Statement of Financial Position

2019 2020 2021 (9 months)
Non-current assets
Property, plant and equipment ₦375m ₦470m ₦470m
Deferred tax ₦30m ₦35m ₦40m
Total non-current assets (A) ₦405m ₦505m ₦510m
Current assets
Inventories ₦425m ₦525m ₦655m
Trade and other receivables ₦125m ₦150m ₦175m
Cash and equivalents ₦425m ₦545m ₦780m
Total current assets (B) ₦975m ₦1,220m ₦1,610m
Total assets (A + B) ₦1,380m ₦1,725m ₦2,120m

Equity and Liabilities

2019 2020 2021 (9 months)
Share capital and reserves ₦885m ₦1,135m ₦1,430m
Long-term loans ₦125m ₦125m ₦125m
Employees’ benefits ₦20m ₦35m ₦50m
Deferred tax ₦55m ₦65m ₦70m
Non-current liabilities ₦200m ₦225m ₦245m
Trade and other payables ₦270m ₦335m ₦410m
Tax payable ₦25m ₦30m ₦35m
Current liabilities ₦295m ₦365m ₦445m
Total equity and liabilities ₦1,380m ₦1,725m ₦2,120m

It has become necessary, and as part of the NGX Exchange Limited‟s requirements,
to appoint another firm of accountants to review the financial statements for some
specified periods. Your firm Stratcom Partners has been approached to carry out the
necessary review.

Required:

a. Highlight the features of professional engagements as contained in ISRE 2410:
International Standard on Review Engagement and ISRS 4410 (revised):
International standard on Related Services. (8 Marks)
b. Detail out the procedures to be carried out in the review of interim financial
information. (6 Marks)

c. In view of the changes in inventories in the financial statements given above,
between the last two periods, provide the substantive procedures that would
be carried out to establish a reliable evidence of the change. (6 Marks)

d. Prepare the outline of the reporting requirements of a compilation engagement.
(10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2023 – L3 – SA – Q1 – Audit of Complex Entities"

  • 30 Marks

CR – Nov 2018 – L3 – SA – Q1a – Consolidated Financial Statements (IFRS 10)

Prepare a consolidated statement of financial position for Adegaga Laboratories Plc., including the effects of an acquisition and goodwill impairment.

Adegaga Laboratories Plc (“AdeLabs”) is one of the largest companies in Nigeria engaged in cosmetic development and manufacturing. Its largest customer base is in the healthcare sector for post-surgery patients and the Nigeria movie industry (aka Nollywood). In the prior financial period, AdeLabs’ expansion strategy has been largely focused on growth by acquisition and joint ventures.

Additional Information:

  1. As part of this, AdeLabs acquired 80% of the equity share capital of Bodegas Limited (“Bodegas”) on January 1, 2015, when the retained earnings of Bodegas was N93.75 million. Following the share acquisition, AdeLabs had control over Bodegas – no shares have been issued by Bodegas following the acquisition. The non-controlling interest in Bodegas was measured at its fair value of N20 million at the date of acquisition.
  2. On January 1, 2016, AdeLabs acquired 50% of the equity share capital of ChidePlastics Limited (“ChidePlast”) when the retained earnings of ChidePlast was N41.25 million. This acquisition was classified as a joint venture in accordance with IFRS 11 Joint Arrangements. ChidePlast has not issued any shares since the acquisition date.
  3. The balance on “other reserves” relates to movements in the values of investments in Bodegas and ChidePlast in the books of AdeLabs. N18.75 million relates to Bodegas, and the remainder to ChidePlast.
  4. AdeLabs’ non-current liabilities relate to a borrowing (long-term) taken out on January 1, 2017. This borrowing has an agreed coupon rate of 4% p.a., and the interest expense due in respect of 2017 has been paid and accounted for in profit for the year. The effective interest rate estimated with this financial liability is 8% p.a.
  5. As part of its annual impairment review, AdeLabs concluded that the goodwill on the acquisition of Bodegas was impaired by 20% at December 31, 2017. No other impairments of goodwill have arisen.
  6. AdeLabs sold goods to ChidePlast with a value of N75 million and a selling margin of 40% in November 2017. As at year-end December 31, 2017, 75% of these items are unsold.

Accounts for all companies are made up to December 31 annually.

Required:

Prepare for Adegaga Laboratories Plc:

  1. A consolidated statement of financial position as at December 31, 2017. (20 Marks)
  2. On January 1, 2018, AdeLabs acquired an additional 10% of the equity shares of Bodegas. The purchase consideration for this additional acquisition was N52,500,000.

    i. Briefly explain how this additional acquisition will impact the preparation of AdeLabs’ consolidated financial statements for the year ended December 31, 2017. (4 Marks)

    ii. Calculate the adjustment that will be required to be made to AdeLabs’ statement of financial position as a result of this acquisition. (6 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – Nov 2018 – L3 – SA – Q1a – Consolidated Financial Statements (IFRS 10)"

  • 15 Marks

CR – Nov 2022 – L3 – Q7 – Impairment of Assets (IAS 36)

: Evaluate the treatment of a property held for sale and assess impairment adjustments per IFRS 5.

Kukundawa Plc acquired a property for N8 million on which annual depreciation is charged on a straight-line basis at the rate of 7.5%. An impairment loss of N700,000 was recognized at the end of the May 31, 2018 financial year when accumulated depreciation was N2 million. Consequently, the property was valued at its estimated value in use. The company planned to move to new premises before the property was reclassified as held for sale on October 1, 2018. By this time, the fair value less costs to sell was N4.8 million. Kukundawa Plc published interim financial statements on December 1, 2018, by which time the property market value had improved, and the fair value less costs to sell was reassessed at N5.04 million. At the year end, on May 31, 2019, it had improved further, so that the fair value less costs to sell was N5.9 million. The property was disposed of eventually on June 5, 2019, for N6 million.

Required:
a. Assess the above transactions based on the requirements of IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations. (5 Marks)
b. Evaluate the impact of the events occurring on the property over time and on the financial statements up to the date of disposal. (10 Marks)
(Total 15 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – Nov 2022 – L3 – Q7 – Impairment of Assets (IAS 36)"

  • 1 Marks

FA – Nov 2020 – L1 – SA – Q10 – Accounting from Incomplete Records

Identifies the situation where the statement of affairs is used to ascertain opening equity.

Where there are no proper books of account, the equity at the commencement of a period is ascertained by preparing:
A. Statement of profit or loss
B. Statement of financial position
C. Statement of affairs
D. Bank reconciliation statement
E. Receivables and payables account

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2020 – L1 – SA – Q10 – Accounting from Incomplete Records"

  • 1 Marks

FA – Nov 2012 – L1 – SA – Q10 – Financial Statements Preparation

Calculating the total asset value from opening balances.

The following are opening balances in the ledger accounts of Doodle Limited:

Plant and equipment N80,000
Inventories N10,000
Trade receivables N18,000
Loan N20,000
Bank balance (credit) N15,000

What is the total asset value of the company?

A. N90,000
B. N108,000
C. N123,000
D. N128,000
E. N143,000

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2012 – L1 – SA – Q10 – Financial Statements Preparation"

  • 1 Marks

FA – Nov 2012 – L1 – SA – Q3 – Financial Statements Preparation

Determining which item is not part of the statement of financial position.

Which of the following will NOT be a content of the Statement of Financial Position of a company?

A. Non-current assets
B. Finance charge
C. Inventory
D. Payables
E. Loan notes

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2012 – L1 – SA – Q3 – Financial Statements Preparation"

  • 15 Marks

FA – May 2014 – L1 – SB – Q5 – Preparation of Financial Statements

Preparation of profit and loss statement and statement of financial position for Gowell Limited.

The following balances were extracted from the books of Gowell Limited as at 31 December 2012 after the preparation of the Trading account:

Item N’000
Share capital: Authorised, issued, and fully paid: 300 million ordinary shares of N1 each 300,000
Cash at bank and in hand 750
Inventories as at 31 December 2012 91,800
Trade receivables 28,657
Trade payables 22,513
Gross profit from trading account 193,413
Revenue reserve as at 1/1/2012 50,000
Salaries and wages 42,645
Prepayments 900
Bad debts 750
Accrued expenses 789
Directors’ current account 3,750
Finance cost 900
Rents and insurance 2,280
Sundry expenses 6,150
6% Loan notes 30,000
Electricity 1,965
Postages and telephones 1,200
Motor vehicle (cost N37.5 million) 22,500
Office fittings and equipment (cost N98.25 million) 63,525
Retained earnings as at 1 January 2012 33,450
Land and buildings 369,893

Additional Information:
(i) Office fittings and equipment to be depreciated at 15% per annum on cost and motor vehicles at 20% on cost.
(ii) Provisions are to be made for:

  • Directors’ fees N12,000,000
  • Audit fees N5,000,000
    (iii) N822,000 in respect of electricity consumed up to 31 December 2012 has not been posted to the ledger.
    (iv) The Directors have recommended that N30,000,000 be transferred to revenue reserves.

You are required to prepare:
a. The Statements of Profit and Loss of Gowell Limited for the year ended 31 December 2012.
b. The statement of financial position as at 31 December 2012.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2014 – L1 – SB – Q5 – Preparation of Financial Statements"

  • 7 Marks

FR – May 2019 – L2 – Q7b – Impairment of Assets (IAS 36)

Preparation of financial statements extracts for intangible assets and associated costs for Soft Solutions Limited.

b. During the year ended 31 December, 2018 Soft Solutions Limited carried out
the following transactions:

  • N720m was spent on developing a new “Microfinance Software” which
    received the approval of software regulatory authority in Nigeria on 1 July,
    2018 and is proving commercially successful.
    The financial controller expects the project to be in profit within 12 months
    of the approval date. The patent was registered with Federal Ministry of
    Trade and Investment on 1 July, 2018; it costs N180m and remains in force
    for three years.
  • On 1 September, 2018 Soft Solutions Limited acquired an up to date list of
    Global Positioning System (GPS) at a cost of N60m and the company has
    been visiting the tracked customers to explain the operations of the new
    microfinance software in rural and urban areas. This is expected to generate
    sales throughout the life-cycle of the microfinance software.
  • A research project was set up on 1 October, 2018 which is expected to result
    in a new banking software called “Recent Bankers”. N24m was spent on
    computer equipment and N48m on staff salaries. The equipment has an
    expected life of four years

Required:

Using the above information:
i. Prepare the extract of statement of financial position of Soft Solutions
Limited as at 31 December, 2018. (5 Marks)
ii. Prepare the summary of the cost to be charged to statement of profit or
loss for the year ended 31 December, 2018. (2 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2019 – L2 – Q7b – Impairment of Assets (IAS 36)"

  • 20 Marks

FA – May 2018 – L1 – SB – Q3 – Accounting from Incomplete Records

Prepares financial statements from incomplete records of Peju's grocery store after a flood incident.

Peju runs a big grocery store in Ibadan, but many of her accounting records were destroyed by a flood incident close to the end of the financial year of the business. From the records that were retrieved after the incident, the following balances were gathered in respect to her assets and liabilities at the beginning of the year:

In addition, you were informed that:
(i) Inventory was valued at N46,510,000, trade receivables at N20,680,000, and trade payables at N15,430,000.
(ii) Sundry expenses accrued amounted to N370,000 for 2016.
(iii) Depreciation is to be provided as follows: furniture and fittings 10% and motor vehicle 20% on reducing balance method.
(iv) Peju took some groceries from the store costing N2,060,000. She is yet to pay.
(v) Allowances for doubtful debts are raised at the beginning and end of the year at 5%. Bad debts of N600,000 had been written off the trade receivables as at December 31, 2017.
(vi) The insurance policy redeemed was to be used as additional capital.

Required:
a. Calculate the capital as at January 1, 2017. (6 Marks)
b. Prepare the statement of profit or loss for the year ended December 31, 2017. (8 Marks)
c. Prepare the statement of financial position as at December 31, 2017. (6 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2018 – L1 – SB – Q3 – Accounting from Incomplete Records"

  • 1 Marks

FA – May 2018 – L1 – SA – Q5 – Elements of Financial Statements

Identifies elements related to the measurement of an entity's financial position.

Which of the following elements is directly related to the measurement of an entity’s financial position?
A. Performance, income, and expenses
B. Income, expenses, and equity
C. Performance, income, and equity
D. Assets, liabilities, and equity
E. Assets, liabilities, and performance

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2018 – L1 – SA – Q5 – Elements of Financial Statements"

  • 20 Marks

FA – Nov 2021 – L1 – SB – Q3 – Trial Balance

This question involves preparing financial statements based on a given trial balance and additional adjustments.

The following balances remained in the books of Chukwu Limited as at December 31, 2020:

Accounts ₦’000
200,000,000 ordinary shares of N1 each 200,000
Cash at bank and in hand 500
Inventory (December 31, 2020) 61,200
Receivables 18,005
Payables 15,009
Gross profit 128,942
General reserves 25,000
Salaries and wages 28,430
Prepayments 600
Bad debts written off 500
Accrued expenses 526
Director’s account (Credit) 2,500
Interest on loan notes (half year) 600
Sundry expenses 4,100
Rates and insurance 1,520
6% loan notes 20,000
Lighting and cooling 1,310
Postage and telephones 800
Motor vehicles (Cost ₦25,000,000) 25,000
Office fittings and equipment (Cost ₦65,500,000) 42,350
Provision for depreciation – Motor vehicles 10,000
Provision for depreciation – Office fittings & equipment 23,150
Profit or loss (January 1, 2020) (Credit) 22,300
Land and buildings (Cost) 239,362

Additional Information:

  1. Office fittings and equipment are to be depreciated at 15% on cost, and motor vehicles at 20% of cost.
  2. Provisions are to be made for:
    • Directors’ fees of N6,000,000
    • Audit fees of N2,500,000
  3. The amount for insurance includes a premium of ₦600,000 paid in September 2020 to cover fire loss for the period September 1, 2020, to August 31, 2021.
  4. A bill for N548,000 in respect of electricity consumed up to December 31, 2020, has not been accounted for.
  5. The directors have recommended:
    • N15,000,000 be transferred to general reserves
    • A 5% dividend on ordinary share capital

You are required to prepare:
a. The trial balance of Chukwu Limited at December 31, 2020. (6 Marks)
b. The statement of profit or loss for the year ended December 31, 2020. (8 Marks)
c. The statement of financial position as at December 31, 2020. (6 Marks)
Note: Ignore taxation.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2021 – L1 – SB – Q3 – Trial Balance"

  • 6 Marks

FA – May 2022 – L1 – SB – Q1a – Financial Statements Preparation

Identify and list the components of financial statements according to IAS 1.

In accordance with IAS 1 – Presentation of Financial Statements, state the components of financial statements.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2022 – L1 – SB – Q1a – Financial Statements Preparation"

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@nbcinstitute.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
error: Content is protected !!
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan