Suggested solutions Mock Final exam paper ACCT3102 2009v 3

Suggested solutions Mock Final exam paper ACCT3102 2009v 3...

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SUGGESTED SOLUTIONS: ACCT3102 MOCK FINAL EXAM PAPER SEMESTER 1, 2007 Question 1 Knocking of the almonds __________________________________________________________ Inventory of almonds Dr $600 000 Gain on harvest Cr $460 000 Cash at bank Cr 140 000 __________________________________________________________ ( Sale of the almonds __________________________________________________________ Cash at bank Dr $520 000 Sales revenues Cr $520 000 __________________________________________________________ Cost of almonds sold Dr $600 000 Inventory of almonds Cr $600 000 __________________________________________________________ Almond grove Dr $100 000 Increment in value of almonds (gain) Cr $100 000 (b) Revenues in almond inventory $460 000 Revenues from sale of almonds 520 000 Cost of almonds sold (600 000) Revaluation increment (5 000 000 – 5 100 000) 100 000 Profit from operations $480 000 Question 2 Note: In this question employees are eligible for a pro-rata payment of their LSL entitlement after 10 years. This means that they are unconditionally entitled to the pro-rata cash payment for their LSL from 10 years onward. Thus, there is no need to discount any pro-rata payment entitlements such as the $14,000 payments calculated below – that amount is already in present value terms. This is also the reason why the LSL entitlement of $4,125 was discounted over 5 years (10-5yrs) rather than over 10 years (15-5 yrs). A cash payment can be received after 10 years. Provision for LSL balance = $32 331 $66 245 x 5/15yrs x 13/52wks = $5 520 x 0.7473* = $4 125 $70 000 x 12/15yrs x 13/52 wks = $14 000
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* (1.06) -5 $4 125 x 35% x 3 employees = $4 331 $14 000 x 100% x 2 employees = $28 000 $32 331 Question 3 1 April 2006 – Initial recognition Dr Deposit on SPI futures contract $55,000 Cr Cash at bank $55,000 30 June 2006 – Reporting date Dr Investment in shares $3,120 Cr Gain on investment (p&l) $3,120 ($293,120 – 290 000) 30 June 2006 – Reporting date Dr Loss on futures contract $1 600 Cr Deposit on SPI futures contract $1 600 ($266,000 - $264,400 = $1 600) Dr Deposit on SPI futures contract $1 600 Cr Cash at bank 1 600 31 August 2006 – Sale of shares Dr Cash at bank $278,000 Dr Loss on investment $15,120 Cr Investment in shares $293,120 31 August 2006 – Futures closed out Dr Deposit on SPI futures contract $13,000 Cr Gain on futures contract $13,000 ($266,000 - $253,000) Dr Cash at bank $68,000 Cr Deposit on SPI futures contract $68,000 ($13,000 + $55,000)
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Question 4 (a) The bonds can potentially be classified as at fair value through profit and loss because they can be designated as such. The carrying amount should be $52 500 and the change in fair value should be recognised in profit and loss. (b)
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Suggested solutions Mock Final exam paper ACCT3102 2009v 3...

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