1 A

2 D
3 C
4 D
5 C
6 B
7 D
8 C
9 B
10 A
11 C
12 C
13 B
14 B
15 C 2 marks each
Part A

Revenue
Cost of sales
Gross profit
Other income
Selling and distributions expenses
Administrative expenses
Finance costs
Profit before tax
Income tax expense
Profit for the year
Other comprehensive income:
Items that will not be reclassified subsequently to profit or loss:
Gain on valuation of financial assets net of tax

Total comprehensive income for the year

Part B

Balance at 30 June 2021

Comprehensive income for the year ended 30 June 2022
Dividends
Transfer to general reserve
Issue of share capital
Balance at 30 June 2022

Part C
(I) Accounting Estimate

(II) An accounting estimate may need revision if changes occur in the circumstances on
which the estimate was based or as a result of new information or more experience. For
example, technological changes may require the estimate of an asset’s useful life to be
downgraded, or new information received about the financial status of a customer may
require an increase in the estimate of bad debts.
(III) the change in an accounting estimate must be applied prospectively by including it in
profit or loss in the reporting period of the change. The change may affect only the current
period’s profit or loss (e.g. bad debts) or profit or loss of both the current period and future
periods (e.g. depreciation due to the change in the useful life of a non-current asset).
Additionally, the nature and amount of the change shall be disclosed for the current, and if
practicable, for future financial periods.
 $'000
750 0.5 mark
-400 0.5 mark
350
35 0.5 mark
-50 0.5 mark
-30 0.5 mark
-15 0.5 mark
290
-50 0.5 mark
240 0.5 mark

14 0.5 mark
254 0.5 mark

Foreign
Share General currency Retained Total
translatio
capital reserve earnings equity
n reserve
$ $ $ $ $
80 000 20 000 30 000 80 000 210 000

7 000 65 000 72 000 1 mark

(55 000) (55 000) 1 mark
5 000 (5 000) 1 mark
20 000 20 000 1 mark
100 000 25 000 37 000 85 000 247 000 1 mark

1 mark

2 marks
2 marks
Part I
An increase in cash does not necessarily correspond to generating a profit. There are several reasons for this.
First, cash may be generated from operating, financing or investing activities, or any combination of these
The company’s net increase in cash may have resulted from cash generated from financing activities, such as borr
direct effect on profit
Investing activities, such as the sale of equipment, may also be a source of cash inflows. The sale of equipment m
decrease profit depending on whether the proceeds of sale exceed the carrying amount
Lastly, even though operating activities may be a dominant source of net cash inflows, the company might not gen
in the current period. Profit is determined on an accrual basis, which can give rise to timing differences between c
recognition of income and expenses. For example, some operating cash inflows, such as the collection of receivab
beginning of the period, may relate to revenue that has already been recognised in a previous period
Similarly, profit may have been decreased by the recognition of expenses that have not yet resulted in a cash outfl

Part II
Ommission or misstatement of this information could impact the decision made
less than 5 %, immaterial, 5-10% professional judgement, >10% material
e.g Cash receipts from customers, cash paid to suppliers and employees
2 marks

2 marks

2 marks

1 mark
1 mark
2 marks
(a)

(b)
(c)

OR

(d)

(e)
Part A
Year of acquisition:
Excess is shown in the pre-acquisition entry as a gain.

Subsequent years:
The excess is subsumed into the opening balance of retained earnings. It reduces the balance
recorded by the subsidiary as the parent paid less for the subsidiary than the fair value of the
identifiable assets and liabilities of the subsidiary.

Part B
Acquisition analysis:
At 1 July 2016:
Net fair value of identifiable assets
and liabilities of Robert Ltd

Consideration transferred
Gain on bargain purchase

Worksheet entries at 1 July 2016:

1. Business combination valuation reserve entries

Business combination valuation reserve

2. Pre-acquisition entries
Retained earnings (1/7/16)
Share capital
General reserve

Part C
Sales revenue

Sales revenue

Accumulated depreciation

(20% x ½ x $7000)
Inventory
Proceeds on sale of non-current asset

Inventory

Debentures

Interest revenue

(10% x $100 000 x ¾)

Interest payable

(10% x $100 000 x ¼)

Dividend payable

Dividend revenue
2.5 marks

2.5 marks

= ($81 000 + $31 000 + $41 000) (equity)

- $5 000 (goodwill)
= $148 000
= $146 000
= $146 000 – $148 000
= $2 000 3 marks, award partial mark

Dr 5 000
Goodwill Cr 5 000 1 mark

Dr 41 000 0.5 mark

Dr 81 000 0.5 mark
Dr 31 000 0.5 mark
Business combination valuation reserve Cr 5 000 0.5 mark
Gain on bargain purchase Cr 2 000 0.5 mark
Shares in Robert Ltd Cr 146 000 0.5 mark

Dr 65 000
Cost of sales Cr 62 500
Inventory Cr 2 500 3 marks

Dr 62 000
Cost of sales Cr 55 000
Machinery Cr 7 000 3 marks

Dr 700
Depreciation expense Cr 700 1 mark
Dr 300
Dr 800
Carrying amount of non-current asset sold Cr 1 100

Dr 300
Loss on sale of non-current asset Cr 300 2 marks

Dr 100 000
Debentures in Platypus Ltd Cr 100 000 1 mark

Dr 7 500
Interest expense Cr 7 500 1 mark

Dr 2500
Interest receivable Cr 2500 1 mark

Dr 6 000
Dividend declared Cr 6 000 0.5 mark

Dr 6 000
Dividend receivable Cr 6 000 0.5 mark
3 marks, award partial marks if answer is incorrect
 1300000

Part I Date Spot rate Forward rate

1-Mar-22 0.41
1-May-22 0.38 0.36
30-Jun-22 0.37 0.35
1-Aug-22 0.33 0.33

1-Mar-22 Inventory 3170732

Accounts Payable

1-May-22 Foreign exchange loss 250321

Accounts Payable

30-Jun-22 Forward contract 103175

Gain on forward contract

Foreign exchange loss 92461

Accounts Payable

1-Aug-22 Forward contract 225108

Gain on forward contract

Foreign exchange loss 425880

Accounts Payable

Accounts payable 3939394

Forward contract
cash

Part II To protect the company from paying excessive amounts of money and make huge losess due to the fluctutation
Total loss when hedged 440379
Total loss not hedged 768662
Yes it is benefical because if there was no hedge then total loss would have been more
 Receivable on forward contract Amount payable on forward contract Fair value of forward contract

3611111 3611111 0
3714286 3611111 103175
3939394 3611111 328283

3170732 2 marks

250321 2 marks

103175 1 mark

92461 2 marks

225108 1 mark

425880 2 marks

328283
3611111 3 marks

of money and make huge losess due to the fluctutations In the exchange rates 1 mark
1 mark
1 mark
al loss would have been more 1 mark
gain/loss on forward contract

1 mark
103175 1 mark
225108 1 mark