Question Tag: Revaluation

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FA – Nov 2020 – L1 – SB – Q6b – Partnership Accounts

Prepare the revaluation account, partners' capital accounts, and the statement of financial position.

Question

b. Emeka has been in business as a Japan spare part dealer. The last statement of financial position of his business as at September 30, 2019, is given below:

	N’000	N’000
Equity
Capital	1,000
Retained earnings	130
	1,130
Drawings	(60)
	1,070
Non-current assets:
PPE		1,100
Current assets:
Inventories		190
Trade payables		40
Bank		45
	1,375	1,375

On October 1, 2019, he agreed with Bode to join him, and the new business will trade under the name and style EmBo Ventures.

Terms of the new business:

Bode is to contribute capital of N1,250,000 for an equal share of profits.
The firm will take over the assets and liabilities of Emeka at their book values, except for:
- PPE: N1,250,000
- Inventories: N175,000
The partners will maintain equal capital, and any shortfall in Emeka’s capital should be made good by credit from revaluation or through additional funds.

Required:

Prepare for EmBo Ventures: i. Revaluation account (5 Marks)
ii. Partners’ capital accounts (5 Marks)
iii. Statement of financial position as at October 1, 2019 (5 Marks)

(Total: 15 Marks)

Answer

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Tags: Capital Accounts, Partnership, Revaluation, Statement of Financial Position
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2020

FA – Nov 2012 – L1 – SA – Q13 – Financial Statements Preparation

Determining the correct statement about limited liability company accounts.

Question

Which of the following statements is correct about the accounts of limited liability companies?

A. Revaluation surplus on a non-current asset arising from disposal of the asset at a profit
B. Events after the reporting period require that non-adjusting events should be disclosed in the notes to the financial statements
C. The authorised share capital consists of a company’s nominal capital value of shares and loan notes raised by the company
D. Revaluation surplus on investment properties is debited to Income Statement
E. Income is not an element of financial statements

Answer

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Tags: Accounts, Company, Revaluation, Share Capital
Level: Level 1

Topic: Financial Statements Preparation
Series: NOV 2012

FA – Nov 2013 – L1 – SA – Q25 – Accounting for Property, Plant, and Equipment (IAS 16)

Understanding the term for a new value resulting from revaluation under IAS 16.

Question

According to IAS 16 (Property, Plant, and Equipment), the new value as a result of a revaluation exercise carried out on property, plant, and equipment, within the context of the historical cost system is called ____________.

Answer

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Tags: and Equipment, IAS 16, Plant, Property, Revaluation
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16
Series: NOV 2013

FA – Nov 2013 – L1 – SA – Q11 – Partnership Accounts

Reason for revaluing assets when partnership composition changes.

Question

Assets must be revalued where there is a change in the partnership composition because:

A. Inflation affects the values of partnership assets
B. The economic value of the partnership must be enhanced
C. Deflation affects the value of partnership assets
D. It helps to prevent injustice to the concerned partners
E. The law insists that there should be a revaluation

Answer

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Tags: Asset Valuation, Partnerships, Revaluation
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2013

FA – Nov 2013 – L1 – SA – Q10 – Partnership Accounts

Necessary entries for writing off net decreases in the Revaluation Account.

Question

The necessary accounting entries to write-off net decrease in the Revaluation Account of a partnership are:

A. Dr. Revaluation Account; Cr. Partners’ Capital Account
B. Dr. Partners’ Capital Accounts; Cr. Revaluation Account
C. Dr. Partners’ Current Accounts; Cr. Revaluation Account
D. Dr. Revaluation Account; Cr. Partners’ Current Account
E. Dr. Revaluation Account; Cr. Realisation Account

Answer

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Tags: Accounting Entries, Partnerships, Revaluation
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2013

FR – May 2019 – L2 – Q4c – Property, Plant, and Equipment (IAS 16)

Preparation of extracts of the statement of profit or loss and statement of financial position for Chidinma Ventures Plc, accounting for leasehold property revaluation.

Question

Chidinma Ventures Plc. acquired a 12-year lease on a property on 1 October, 2016 at a cost of N132 million. The company’s policy is to revalue its properties to their market value at the end of each year.

Accumulated amortization is eliminated, and the property is restated to the revalued amount. Annual amortization is calculated on the carrying values at the beginning of the year. The market values of the property on 30 September 2017 and 2018 were N127.05 million and N96.25 million, respectively. The existing balance on the revaluation surplus at 1 October, 2016 was N27.5 million. This is related to some non-depreciable land whose value had not changed significantly since 1 October 2016.

Required:
Prepare extracts of the statement of profit or loss and statement of financial position for the year ended 30 September 2017 and 2018 in respect of the leasehold property.

Answer

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Tags: Amortization, IAS 16, Leasehold Property, Revaluation, Revaluation Loss, Revaluation Surplus
Level: Level 2

Topic: Property, Plant, and Equipment (IAS 16)
Series: MAY 2019

FR – May 2019 – L2 – Q4b – Property, Plant, and Equipment (IAS 16)

Explanation of revaluation of non-current assets and accounting treatment of revaluation surplus/deficit and gains/losses on disposal.

Question

You are a senior accounting officer in Chidinma Ventures Plc. The chief accountant of the company has requested you to explain to some newly recruited trainee accountants, the requirements of IAS 16 as regards the revaluation of non-current assets and accounting treatment of surpluses and deficits on revaluation as well as gains and losses on disposal of assets.

Required:
Explain the transactions as required by the chief accountant.

Answer

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Tags: Deficit, Disposal, Gains, IAS 16, Losses, Revaluation, Surplus
Level: Level 2

Topic: Property, Plant, and Equipment (IAS 16)
Series: MAY 2019

FA – May 2018 – L1 – SB – Q5 – Partnership Accounts

Prepares the statement of financial position for the partnership formation between Yerima and Boluke.

Question

Yerima and Boluke have been friends for some time, and they both had different businesses as sole traders. They decided to form a partnership with effect from May 1, 2017. Their respective financial positions on April 30, 2017, were as follows:

Partnership Agreement Details:
(i) Yerima: Premises were revalued at N30,000,000 to be used as an office annex, and equipment valued at N3,000,000 was counted as obsolete. Some customers were found unable to pay their outstanding debts, so N2,000,000 should be written off. The payables were paid out of the bank balance, and other assets were brought in at book value.

(ii) Boluke: Agreed to acquire additional equipment costing N3,000,000, pay his payables from his bank balance, repay his loan, and bring in other assets at book values.

Required:
a. Prepare the statement of financial position for the partnership of Yerima and Boluke as at May 1, 2017. (10 Marks)

b. State TEN provisions that should be contained in a partnership agreement. (10 Marks)
(Total: 20 Marks)

Answer

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Tags: Capital Accounts, Partnership, Revaluation
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2018

PSAF – Mar/Jul 2020 – L2 – Q1a – Accounting for Government Assets and Liabilities

Prepare a non-current assets schedule for a university and identify features of a finance lease in compliance with IPSAS.

Question

In the year 2000, Amotekun State of Nigeria established two State Universities University of Education (ASUE), to cater for the indigenes of the state. The following information relates to each of the universities:
a. The Bursar of Amotekun State University, Oke-Mosan, delegated the preparation of Non-current assets schedule to be included in the final accounts of the University for the year ended December 31, 2018, to one of the Deputy Bursars in the Bursary Department.
In the discharge of the assignment, the Deputy Bursar reviewed the following documents:

International Public Sector Accounting Standards (IPSAS).
Previous year’s financial report.

He was able to obtain the following information:

(i)

Non-current assets register.
Valuation reports, etc.

(i) It is the policy of the University to charge a full year’s depreciation on assets irrespective of the month of purchase or revaluation during the year, while no depreciation is charged on assets disposed of during the year.

(ii) Equipment on lease is depreciated equally over the period of the lease.

(iii) Land and buildings were professionally revalued during the year by Parisco & Associates, a firm of Chartered Surveyors and Valuers, and approved by the State Ministry of Works and Housing. The valuation, which was based on the open market value, produced a revaluation surplus of N150,000,000 over the carrying amount as at January 1, 2018.

(iv) The University purchased plant and machinery which was imported from the United Kingdom at a cost of N430,500,000. Installation and transportation costs to the University amounted to N20,500,000.

(v) The Deputy Bursar that prepared the non-current assets schedule last year classified some of the computer equipment purchased on May 15, 2017, costing N26,000,000 as office equipment. A reclassification is required in the current year.

(vi) Office furniture and fittings costing N12,250,000 were disposed of during the year for N11,500,000, which resulted in a profit of N750,000.

(vii) The University entered into an equipment lease agreement with Ode Finance Limited; the terms and conditions of the finance lease are as follows:
Principal sum: N45,000,000
Lease period: 5 years
Lease rentals: N10,000,000 p.a.
(viii) During the year, the University acquired a fleet of vehicles at the cost of N50,000,000. The State Government financed this acquisition.

Required: i. In accordance with IPSAS 13, identify FIVE features of a finance lease. (5 Marks) ii. Prepare the non-current assets schedule of Amotekun State University suitable for publication. (15 Marks)

Answer

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Tags: Asset Register Question, Depreciation, Finance leases, IPSAS, Non-current assets schedule, Revaluation
Level: Level 2

FA – Nov 2022 – L1 – SB – Q6c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question asks for the calculation of depreciation on revalued property and adjustments to account for revaluation gains and losses.

Question

Explain how revaluation of property, plant and equipment affects the calculation of depreciation and the adjustments to revaluation surplus or deficit.
(5 Marks)

Answer

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Tags: and Equipment (IAS 16), Depreciation, Plant, Property, Revaluation
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16
Series: NOV 2022

FA – Nov 2020 – L1 – SB – Q6b – Partnership Accounts

Prepare the revaluation account, partners' capital accounts, and the statement of financial position.

Question

b. Emeka has been in business as a Japan spare part dealer. The last statement of financial position of his business as at September 30, 2019, is given below:

	N’000	N’000
Equity
Capital	1,000
Retained earnings	130
	1,130
Drawings	(60)
	1,070
Non-current assets:
PPE		1,100
Current assets:
Inventories		190
Trade payables		40
Bank		45
	1,375	1,375

On October 1, 2019, he agreed with Bode to join him, and the new business will trade under the name and style EmBo Ventures.

Terms of the new business:

Bode is to contribute capital of N1,250,000 for an equal share of profits.
The firm will take over the assets and liabilities of Emeka at their book values, except for:
- PPE: N1,250,000
- Inventories: N175,000
The partners will maintain equal capital, and any shortfall in Emeka’s capital should be made good by credit from revaluation or through additional funds.

Required:

Prepare for EmBo Ventures: i. Revaluation account (5 Marks)
ii. Partners’ capital accounts (5 Marks)
iii. Statement of financial position as at October 1, 2019 (5 Marks)

(Total: 15 Marks)

Answer

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Tags: Capital Accounts, Partnership, Revaluation, Statement of Financial Position
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2020

FA – Nov 2012 – L1 – SA – Q13 – Financial Statements Preparation

Determining the correct statement about limited liability company accounts.

Question

Which of the following statements is correct about the accounts of limited liability companies?

Answer

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Tags: Accounts, Company, Revaluation, Share Capital
Level: Level 1

Topic: Financial Statements Preparation
Series: NOV 2012

FA – Nov 2013 – L1 – SA – Q25 – Accounting for Property, Plant, and Equipment (IAS 16)

Understanding the term for a new value resulting from revaluation under IAS 16.

Question

Answer

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Tags: and Equipment, IAS 16, Plant, Property, Revaluation
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16
Series: NOV 2013

FA – Nov 2013 – L1 – SA – Q11 – Partnership Accounts

Reason for revaluing assets when partnership composition changes.

Question

Assets must be revalued where there is a change in the partnership composition because:

Answer

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Tags: Asset Valuation, Partnerships, Revaluation
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2013

FA – Nov 2013 – L1 – SA – Q10 – Partnership Accounts

Necessary entries for writing off net decreases in the Revaluation Account.

Question

The necessary accounting entries to write-off net decrease in the Revaluation Account of a partnership are:

Answer

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Tags: Accounting Entries, Partnerships, Revaluation
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2013

FR – May 2019 – L2 – Q4c – Property, Plant, and Equipment (IAS 16)

Preparation of extracts of the statement of profit or loss and statement of financial position for Chidinma Ventures Plc, accounting for leasehold property revaluation.

Question

Required:
Prepare extracts of the statement of profit or loss and statement of financial position for the year ended 30 September 2017 and 2018 in respect of the leasehold property.

Answer

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Tags: Amortization, IAS 16, Leasehold Property, Revaluation, Revaluation Loss, Revaluation Surplus
Level: Level 2

Topic: Property, Plant, and Equipment (IAS 16)
Series: MAY 2019

FR – May 2019 – L2 – Q4b – Property, Plant, and Equipment (IAS 16)

Explanation of revaluation of non-current assets and accounting treatment of revaluation surplus/deficit and gains/losses on disposal.

Question

Required:
Explain the transactions as required by the chief accountant.

Answer

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Tags: Deficit, Disposal, Gains, IAS 16, Losses, Revaluation, Surplus
Level: Level 2

Topic: Property, Plant, and Equipment (IAS 16)
Series: MAY 2019

FA – May 2018 – L1 – SB – Q5 – Partnership Accounts

Prepares the statement of financial position for the partnership formation between Yerima and Boluke.

Question

(ii) Boluke: Agreed to acquire additional equipment costing N3,000,000, pay his payables from his bank balance, repay his loan, and bring in other assets at book values.

Required:
a. Prepare the statement of financial position for the partnership of Yerima and Boluke as at May 1, 2017. (10 Marks)

b. State TEN provisions that should be contained in a partnership agreement. (10 Marks)
(Total: 20 Marks)

Answer

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Tags: Capital Accounts, Partnership, Revaluation
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2018

PSAF – Mar/Jul 2020 – L2 – Q1a – Accounting for Government Assets and Liabilities

Prepare a non-current assets schedule for a university and identify features of a finance lease in compliance with IPSAS.

Question

International Public Sector Accounting Standards (IPSAS).
Previous year’s financial report.

He was able to obtain the following information:

(i)

Non-current assets register.
Valuation reports, etc.

(ii) Equipment on lease is depreciated equally over the period of the lease.

(vi) Office furniture and fittings costing N12,250,000 were disposed of during the year for N11,500,000, which resulted in a profit of N750,000.

Answer

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Tags: Asset Register Question, Depreciation, Finance leases, IPSAS, Non-current assets schedule, Revaluation
Level: Level 2

FA – Nov 2022 – L1 – SB – Q6c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question asks for the calculation of depreciation on revalued property and adjustments to account for revaluation gains and losses.

Question

Explain how revaluation of property, plant and equipment affects the calculation of depreciation and the adjustments to revaluation surplus or deficit.
(5 Marks)

Answer

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Tags: and Equipment (IAS 16), Depreciation, Plant, Property, Revaluation
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16
Series: NOV 2022

Question Tag: Revaluation

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FA – Nov 2020 – L1 – SB – Q6b – Partnership Accounts

Prepare the revaluation account, partners' capital accounts, and the statement of financial position.

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FA – Nov 2012 – L1 – SA – Q13 – Financial Statements Preparation

Determining the correct statement about limited liability company accounts.

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FA – Nov 2013 – L1 – SA – Q25 – Accounting for Property, Plant, and Equipment (IAS 16)

Understanding the term for a new value resulting from revaluation under IAS 16.

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q25 – Accounting for Property, Plant, and Equipment (IAS 16)"

FA – Nov 2013 – L1 – SA – Q11 – Partnership Accounts

Reason for revaluing assets when partnership composition changes.

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FA – Nov 2013 – L1 – SA – Q10 – Partnership Accounts

Necessary entries for writing off net decreases in the Revaluation Account.

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FR – May 2019 – L2 – Q4c – Property, Plant, and Equipment (IAS 16)

Preparation of extracts of the statement of profit or loss and statement of financial position for Chidinma Ventures Plc, accounting for leasehold property revaluation.

You're reporting an error for "FR – May 2019 – L2 – Q4c – Property, Plant, and Equipment (IAS 16)"

FR – May 2019 – L2 – Q4b – Property, Plant, and Equipment (IAS 16)

Explanation of revaluation of non-current assets and accounting treatment of revaluation surplus/deficit and gains/losses on disposal.

You're reporting an error for "FR – May 2019 – L2 – Q4b – Property, Plant, and Equipment (IAS 16)"

FA – May 2018 – L1 – SB – Q5 – Partnership Accounts

Prepares the statement of financial position for the partnership formation between Yerima and Boluke.

You're reporting an error for "FA – May 2018 – L1 – SB – Q5 – Partnership Accounts"

PSAF – Mar/Jul 2020 – L2 – Q1a – Accounting for Government Assets and Liabilities

Prepare a non-current assets schedule for a university and identify features of a finance lease in compliance with IPSAS.

You're reporting an error for "PSAF – Mar/Jul 2020 – L2 – Q1a – Accounting for Government Assets and Liabilities"

FA – Nov 2022 – L1 – SB – Q6c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question asks for the calculation of depreciation on revalued property and adjustments to account for revaluation gains and losses.

You're reporting an error for "FA – Nov 2022 – L1 – SB – Q6c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

FA – Nov 2020 – L1 – SB – Q6b – Partnership Accounts

Prepare the revaluation account, partners' capital accounts, and the statement of financial position.

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FA – Nov 2012 – L1 – SA – Q13 – Financial Statements Preparation

Determining the correct statement about limited liability company accounts.

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FA – Nov 2013 – L1 – SA – Q25 – Accounting for Property, Plant, and Equipment (IAS 16)

Understanding the term for a new value resulting from revaluation under IAS 16.

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FA – Nov 2013 – L1 – SA – Q11 – Partnership Accounts

Reason for revaluing assets when partnership composition changes.

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FA – Nov 2013 – L1 – SA – Q10 – Partnership Accounts

Necessary entries for writing off net decreases in the Revaluation Account.

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FR – May 2019 – L2 – Q4c – Property, Plant, and Equipment (IAS 16)

Preparation of extracts of the statement of profit or loss and statement of financial position for Chidinma Ventures Plc, accounting for leasehold property revaluation.

You're reporting an error for "FR – May 2019 – L2 – Q4c – Property, Plant, and Equipment (IAS 16)"

FR – May 2019 – L2 – Q4b – Property, Plant, and Equipment (IAS 16)

Explanation of revaluation of non-current assets and accounting treatment of revaluation surplus/deficit and gains/losses on disposal.

You're reporting an error for "FR – May 2019 – L2 – Q4b – Property, Plant, and Equipment (IAS 16)"

FA – May 2018 – L1 – SB – Q5 – Partnership Accounts

Prepares the statement of financial position for the partnership formation between Yerima and Boluke.

You're reporting an error for "FA – May 2018 – L1 – SB – Q5 – Partnership Accounts"

PSAF – Mar/Jul 2020 – L2 – Q1a – Accounting for Government Assets and Liabilities

Prepare a non-current assets schedule for a university and identify features of a finance lease in compliance with IPSAS.

You're reporting an error for "PSAF – Mar/Jul 2020 – L2 – Q1a – Accounting for Government Assets and Liabilities"

FA – Nov 2022 – L1 – SB – Q6c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question asks for the calculation of depreciation on revalued property and adjustments to account for revaluation gains and losses.

You're reporting an error for "FA – Nov 2022 – L1 – SB – Q6c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

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