Question Tag: Loans

Search 500 + past questions and counting.

AAA – Nov 2012 – L3 – SB – Q2 – Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)

This question discusses the audit steps required to assess the true position of a loan portfolio and the provision for doubtful debts.

Question

Your firm, Alheri & Co, has been appointed to carry out an audit assignment on Barders Bank Limited. The Bank’s year ended 30 September 2010. In the process of carrying out this assignment, it was discovered that no provision was made for doubtful debts. Total loans and advances of N50 billion consisting of 200 customers were found to be at various stages of performance except a N1 billion term loan granted to a Director’s relation’s company on 31 December 2009 to be repaid in N100 million monthly equal instalments commencing from 31 January 2010. Interest was simply agreed at N100,000 per month.

As at the time of this audit, no repayment had been made on this loan.

Required:
a. What audit steps should be taken to ascertain the true position of the loan portfolio? (5 Marks)
b. State the basis and determine the provision that should be made on the loan portfolio. (10 Marks)
(Total 15 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit, Doubtful Debts, Financial Reporting, Loans, Provisions
Level: Level 3

Topic: Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)
Series: NOV 2012

FA – May 2023 – L1 – SA – Q13 – Partnership Accounts

Identifying transactions that will increase partners’ capital account balance in a fixed capital account system.

Question

In a partnership that maintains fixed capital accounts, which of the following transactions will increase partners’ capital account balance?

I. Profit on revaluation
II. Partners’ drawings
III. Partners’ share of goodwill
IV. Loan advanced to the business by a partner

A. I and II

B. I and III

C. II and IV

D. I and IV

E. I, III and IV

Answer

Find Related Questions by Tags, levels, etc.

Tags: Fixed Capital, Goodwill, Loans, Partnership, Profit on Revaluation
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2023

AA – Nov 2015 – L2 – Q3 – Audit and Assurance Risk Environment

Identifying audit risks and auditors' responses, performing proof in total calculations for revenues and expenses, and proposing internal controls for club operations.

Question

You are the senior responsible for planning the audit of Hometown Football Club Limited (HFC) for the year ended May 31, 2008.

HFC runs a football club which was promoted to the top division in the league this season. The football season starts on September 1 and ends on May 31 so that the players get a break over the summer months.

HFC owns their football stadium, which now has the capacity to seat 25,000 people. Of the 25,000 seats, 19,000 are allocated to HFC supporters (home supporters) and are sold to season ticket holders only. The remaining 6,000 tickets are for away supporters and cannot be sold to HFC supporters.

Season tickets cost GHS175 for children. Following their recent promotion, all the season tickets have been sold this year with 70% of season tickets sold to adults and the remaining 30% to children. Tickets for away supporters are always sold at GHS20 per ticket, regardless of whether the ticket is sold to an adult or a child. On average, 50% of away supporter tickets have been sold for each of the 14 home games played at HFC’s stadium during the football season.

HFC’s other revenue streams include the sale of football kits and other memorabilia from the club shop, and food and drink sales from the club snack bars.

Following promotion to the top division, the club added an extra stand to the stadium to increase the seating capacity to the current level of 25,000. Other existing areas of the stadium also underwent maintenance in order to restore them to their original condition. The work was carried out during June and July 2007 and cost a total of GHS3,360,000. To finance this, HFC took out a GHS2,900,000 loan on June 1, 2007. The loan carries an interest rate of 7% and is repayable over the next five years. The loan is secured on the stadium.

The directors feel that the club’s greatest assets (other than the stadium) are the football players themselves. The players have performed so well this year that some of the other football clubs in the same division have made preliminary offers to buy three of HFC’s players. HFC is particularly pleased about this as these players joined the club through their youth academy programme. Consequently, the directors would like to value these three players as intangible non-current assets in HFC’s financial statements. The players will be valued at the offer price received from the other clubs. The directors feel this is a prudent valuation because they are confident that the eventual selling price would be much higher than the preliminary offer.

One of the major drawbacks of the club’s promotion has been that the club has had to increase the level of players’ salaries. The total salary expense for the year is estimated to be in the region of GHS2,800,000. This is a particularly surprising figure as it is higher than the other operating costs for the year, which are estimated at GHS2,400,000.

HFC has just appointed a team of internal auditors. They have not been in position long enough to help you with your audit work, but the directors are keen for the internal auditors to improve the company’s internal controls in relation to the club shop and snack bars.

Required:

a) Using the information provided, describe FIVE (5) audit risks and explain the auditor’s response to each risk.
(10 marks)

b) Describe how the auditor could perform a proof in total calculation to confirm each of HFC’s revenue from ticket sales, loan interest, and payroll expense for players’ salaries.
(4 marks)

c) Explain THREE (3) internal controls the internal auditors of HFC should implement relating to the club shop or snack bars, and state the objective of each of the three controls.
(6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Risk, Football Club, Internal Control, Loans, Payroll, Revenue Verification
Level: Level 2

Topic: Audit and Assurance Risk Environment
Series: NOV 2015

TX – May 2019 – L3 – Q2a – Taxable Income Calculation and Obligations

Calculate the taxable income and assess the tax obligations for a secondment and other income.

Question

Agyemang Boateng has been working with Intellect Consult Limited (ICL) since 2010. At the beginning of January 2016, he was seconded to Accra Metropolitan Assembly (AMA) for a period of six months to be part of a team to spearhead a restructuring exercise and the review of the system of internal controls at the Revenue department of AMA.

Terms of the AMA engagement:

ICL was to be paid a one-off settlement of GH¢10,000 at the completion of the engagement as well as reimbursement of monthly operational expenses incurred based on submission of the relevant invoices.

Agyemang’s only entitlements from AMA were the following monthly allowances:

Inconvenience Allowance: GH¢300
Extra Duties Allowance: GH¢200
Agyemang’s secondment to AMA did not in any way affect his salary and other entitlements from his employer, ICL, as these continued to accrue to him during the period of the secondment.

Agyemang’s earnings and entitlements from ICL for the year of assessment ended 31 December 2016 are as follows:

Basic Salary: GH¢46,000
Bonus: GH¢9,500
Fuel allowance: GH¢1,750
Entertainment allowance: GH¢7,500
Additional Information:

Agyemang stays in a fully furnished ICL bungalow at East Legon in Accra. ICL charges him a rent of GH¢150 per month.
Agyemang makes use of ICL’s company vehicle, driver, and fuel for official use only.
On 1 January 2016, Agyemang successfully applied for a GH¢10,000 loan from his employer, ICL. His employer charged him interest of 2% per annum on the loan. During this period, Bank of Ghana policy rate was 15%. The loan was repayable within ten months.
On 1 October 2016, Agyemang commenced part-time lecturing in Accounting at a local private Senior High School. He was paid monthly for his services, and the total amount received for the three months ended 31 December 2016 was GH¢5,000 gross.
Agyemang’s other non-employment-related income received during the year ended 31 December 2016 were:

Net royalties received for his Accounting textbook: GH¢21,250
Gross local company dividends (Unquoted Company shares): GH¢13,000
Interest on Bank deposits from local financial institutions: GH¢10,000
Gross lottery winnings: GH¢12,000
Required:

i) Calculate Agyemang’s taxable income for the year ended 31 December 2016. (10 marks)

ii) State AMA’s tax obligation when making the disbursement of GH¢10,000 to ICL. (1 mark)

iii) What are the tax implications to Agyemang with respect to the following:

Part-time lecturing
Royalty
Dividends
Interest on bank deposit (2 marks)
iv) What is the tax implication of the loan taken by Agyemang? (1 mark)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Dividends, Employment Income, Interest, Loans, Part-Time Income, Royalties, Taxable Income, Withholding Tax
Level: Level 3

Topic: Tax planning
Series: MAY 2019

BCL – Nov 2020 – L1 – Q2c – Types of Capital and the Financing of Companies

Explain the concepts of a fixed charge and a bond in the context of loans taken by companies.

Question

A loan taken by a company limited by shares may or may not be secured by a charge.

Required:
Explain the following:
i) A fixed charge (3 marks)
ii) A bond (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bond, Companies Act, Company Law, Fixed Charge, Loans
Level: Level 1

Topic: Types of capital and the financing of companies
Series: NOV 2020

AAA – Nov 2012 – L3 – SB – Q2 – Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)

This question discusses the audit steps required to assess the true position of a loan portfolio and the provision for doubtful debts.

Question

As at the time of this audit, no repayment had been made on this loan.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit, Doubtful Debts, Financial Reporting, Loans, Provisions
Level: Level 3

Topic: Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)
Series: NOV 2012

FA – May 2023 – L1 – SA – Q13 – Partnership Accounts

Identifying transactions that will increase partners’ capital account balance in a fixed capital account system.

Question

In a partnership that maintains fixed capital accounts, which of the following transactions will increase partners’ capital account balance?

I. Profit on revaluation
II. Partners’ drawings
III. Partners’ share of goodwill
IV. Loan advanced to the business by a partner

A. I and II

B. I and III

C. II and IV

D. I and IV

E. I, III and IV

Answer

Find Related Questions by Tags, levels, etc.

Tags: Fixed Capital, Goodwill, Loans, Partnership, Profit on Revaluation
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2023

AA – Nov 2015 – L2 – Q3 – Audit and Assurance Risk Environment

Identifying audit risks and auditors' responses, performing proof in total calculations for revenues and expenses, and proposing internal controls for club operations.

Question

You are the senior responsible for planning the audit of Hometown Football Club Limited (HFC) for the year ended May 31, 2008.

HFC’s other revenue streams include the sale of football kits and other memorabilia from the club shop, and food and drink sales from the club snack bars.

Required:

a) Using the information provided, describe FIVE (5) audit risks and explain the auditor’s response to each risk.
(10 marks)

b) Describe how the auditor could perform a proof in total calculation to confirm each of HFC’s revenue from ticket sales, loan interest, and payroll expense for players’ salaries.
(4 marks)

c) Explain THREE (3) internal controls the internal auditors of HFC should implement relating to the club shop or snack bars, and state the objective of each of the three controls.
(6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Risk, Football Club, Internal Control, Loans, Payroll, Revenue Verification
Level: Level 2

Topic: Audit and Assurance Risk Environment
Series: NOV 2015

TX – May 2019 – L3 – Q2a – Taxable Income Calculation and Obligations

Calculate the taxable income and assess the tax obligations for a secondment and other income.

Question

Terms of the AMA engagement:

Agyemang’s only entitlements from AMA were the following monthly allowances:

Agyemang’s earnings and entitlements from ICL for the year of assessment ended 31 December 2016 are as follows:

Basic Salary: GH¢46,000
Bonus: GH¢9,500
Fuel allowance: GH¢1,750
Entertainment allowance: GH¢7,500
Additional Information:

i) Calculate Agyemang’s taxable income for the year ended 31 December 2016. (10 marks)

ii) State AMA’s tax obligation when making the disbursement of GH¢10,000 to ICL. (1 mark)

iii) What are the tax implications to Agyemang with respect to the following:

Part-time lecturing
Royalty
Dividends
Interest on bank deposit (2 marks)
iv) What is the tax implication of the loan taken by Agyemang? (1 mark)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Dividends, Employment Income, Interest, Loans, Part-Time Income, Royalties, Taxable Income, Withholding Tax
Level: Level 3

Topic: Tax planning
Series: MAY 2019

BCL – Nov 2020 – L1 – Q2c – Types of Capital and the Financing of Companies

Explain the concepts of a fixed charge and a bond in the context of loans taken by companies.

Question

A loan taken by a company limited by shares may or may not be secured by a charge.

Required:
Explain the following:
i) A fixed charge (3 marks)
ii) A bond (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bond, Companies Act, Company Law, Fixed Charge, Loans
Level: Level 1

Topic: Types of capital and the financing of companies
Series: NOV 2020

Question Tag: Loans

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

AAA – Nov 2012 – L3 – SB – Q2 – Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)

This question discusses the audit steps required to assess the true position of a loan portfolio and the provision for doubtful debts.

FA – May 2023 – L1 – SA – Q13 – Partnership Accounts

Identifying transactions that will increase partners’ capital account balance in a fixed capital account system.

AA – Nov 2015 – L2 – Q3 – Audit and Assurance Risk Environment

Identifying audit risks and auditors' responses, performing proof in total calculations for revenues and expenses, and proposing internal controls for club operations.

TX – May 2019 – L3 – Q2a – Taxable Income Calculation and Obligations

Calculate the taxable income and assess the tax obligations for a secondment and other income.

BCL – Nov 2020 – L1 – Q2c – Types of Capital and the Financing of Companies

Explain the concepts of a fixed charge and a bond in the context of loans taken by companies.

AAA – Nov 2012 – L3 – SB – Q2 – Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)

This question discusses the audit steps required to assess the true position of a loan portfolio and the provision for doubtful debts.

FA – May 2023 – L1 – SA – Q13 – Partnership Accounts

Identifying transactions that will increase partners’ capital account balance in a fixed capital account system.

AA – Nov 2015 – L2 – Q3 – Audit and Assurance Risk Environment

Identifying audit risks and auditors' responses, performing proof in total calculations for revenues and expenses, and proposing internal controls for club operations.

TX – May 2019 – L3 – Q2a – Taxable Income Calculation and Obligations

Calculate the taxable income and assess the tax obligations for a secondment and other income.

BCL – Nov 2020 – L1 – Q2c – Types of Capital and the Financing of Companies

Explain the concepts of a fixed charge and a bond in the context of loans taken by companies.

Our offerings

Contact Info

Customer

Get In Touch

Question Tag: Loans

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

AAA – Nov 2012 – L3 – SB – Q2 – Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)

This question discusses the audit steps required to assess the true position of a loan portfolio and the provision for doubtful debts.

You're reporting an error for "AAA – Nov 2012 – L3 – SB – Q2 – Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)"

FA – May 2023 – L1 – SA – Q13 – Partnership Accounts

Identifying transactions that will increase partners’ capital account balance in a fixed capital account system.

You're reporting an error for "FA – May 2023 – L1 – SA – Q13 – Partnership Accounts"

AA – Nov 2015 – L2 – Q3 – Audit and Assurance Risk Environment

Identifying audit risks and auditors' responses, performing proof in total calculations for revenues and expenses, and proposing internal controls for club operations.

You're reporting an error for "AA – Nov 2015 – L2 – Q3 – Audit and Assurance Risk Environment"

TX – May 2019 – L3 – Q2a – Taxable Income Calculation and Obligations

Calculate the taxable income and assess the tax obligations for a secondment and other income.

You're reporting an error for "TX – May 2019 – L3 – Q2a – Taxable Income Calculation and Obligations"

BCL – Nov 2020 – L1 – Q2c – Types of Capital and the Financing of Companies

Explain the concepts of a fixed charge and a bond in the context of loans taken by companies.

You're reporting an error for "BCL – Nov 2020 – L1 – Q2c – Types of Capital and the Financing of Companies"

AAA – Nov 2012 – L3 – SB – Q2 – Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)

This question discusses the audit steps required to assess the true position of a loan portfolio and the provision for doubtful debts.

You're reporting an error for "AAA – Nov 2012 – L3 – SB – Q2 – Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)"

FA – May 2023 – L1 – SA – Q13 – Partnership Accounts

Identifying transactions that will increase partners’ capital account balance in a fixed capital account system.

You're reporting an error for "FA – May 2023 – L1 – SA – Q13 – Partnership Accounts"

AA – Nov 2015 – L2 – Q3 – Audit and Assurance Risk Environment

Identifying audit risks and auditors' responses, performing proof in total calculations for revenues and expenses, and proposing internal controls for club operations.

You're reporting an error for "AA – Nov 2015 – L2 – Q3 – Audit and Assurance Risk Environment"

TX – May 2019 – L3 – Q2a – Taxable Income Calculation and Obligations

Calculate the taxable income and assess the tax obligations for a secondment and other income.

You're reporting an error for "TX – May 2019 – L3 – Q2a – Taxable Income Calculation and Obligations"

BCL – Nov 2020 – L1 – Q2c – Types of Capital and the Financing of Companies

Explain the concepts of a fixed charge and a bond in the context of loans taken by companies.

You're reporting an error for "BCL – Nov 2020 – L1 – Q2c – Types of Capital and the Financing of Companies"

Our offerings

Contact Info

Customer

Get In Touch

admin