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Certified ACCounting teChniCiAn exAminAtion

SAmple multiple ChoiCe queStionS June 2009

Paper T6 (UK)Drafting Financial Statements

Sc A y

All questions are compulsory

Note: Section B of the actual exam paper will contain three written questions

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t w ss a yca s a w aa Sc A aa a J 2009

was. t w b a a ss sc A.

A ss Sc A w b w w aks ac.

1 Aye and Bee are in partnership sharing profits and losses in the ratio 3:2 respectively. The partners capital and current

account balances at the beginning of the year were as follows:

Aye Bee$ $

Current accounts 7,500CR 2,100CR

Capital accounts 12,000CR 9,000CR

The partnership made a profit of $100,000 for the year. Ayes drawings were $9,200, and Bees were $7,320.

Wa s Ays c acc baac b a ya?

A $67,500

B $58,300

C $76,700

d $16,700

(2 aks)

2 At 1 May 2009 Tibor purchased 60% of Kinnots $1 ordinary shares for $6,000,000. At that date Kinnot had 5 million

$1 issued ordinary shares and retained earnings of $450,000.

It is group policy to value the non-controlling interest at its proportionate share of the fair value of the subsidiarys

identifiable net assets.

Wa s w acs K?

A $330,000

B $550,000

C $5,7300,000

d $2,730,000

(2 aks)

3 Wc w sas a cc?

A If all the conditions specified in IAS 38 Intangible assets are met, the directors can chose whether to capitalise the

development expenditure or not.

B Amortisation of capitalised development expenditure will appear as an item in a companys statement of changesin equity.

C Capitalised development costs are shown in the statement of financial position as non-current assets.

d Capitalised development expenditure must be amortised over a period not exceeding five years.

(2 aks)

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4 Acc iAS i psa faca Sas, wc w s c aa sa

cas y:

(1) ta csv c ya

(2) dvs

(3) lss sa vss.

(4) iss sa caa.

A 1, 2 and 4 only

B 1, 3 and 4 only

C 1 and 3 only

d 1, 2, 3 and 4

(2 aks)

5 A property company received cash for rent totalling $628,950 in the year ended 31 May 2009. Figures for rent in

advance and in arrears at the beginning and end of the year were:

31 May 2008 31 May 2009

$ $

Rent received in advance 76,950 66,525

Rent in arrears (all subsequently received) 31,725 36,300

Wa a s aa cays c sa ya 31 may 2009 a

c?

A $613,950

B $634,800

C $623,100

d $643,950

(2 aks)

6 Acc iAS 10 evs a r p, wc abv aa vs wc cc a

a, a ajs s aca sas?

(1) A ss sas ac as.

(2) A sy s cays vy ( cays cc sas s ac).

(3) Sa ss a cs s vy a a

(4) t bakcy a aj cs, w a sbsaa b sa a a.

A 3 and 4 only

B 1, 2 and 3

C 2 and 3 only

d 2 and 4 only

(2 aks)

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7 Wc w sas a cc?

(1) t y as cc s a y s caab b as ay s ca b

cs aca sas.

(2) maay as a y ysca asss a cs aca sas.

(3) i s s cs, s sca cs acc s sa asss a vsa

s.

A 1 only

B 2 only

C None of the statements

d 3 only

(2 aks)

8 W caca a cays a a wc w acs w cas a?

(1) A s ss ay sas.

(2) A ss a s.

(3) A wa vaa -c asss.

A 1 only

B 1 and 2

C 2 and 3

d 1 and 3

(2 aks)

9 Steve and Paul are in partnership and share profits equally. Steve receives an annual salary $30,250 and interest on

capital is paid at 5% per year.

At 1 June 2008 their capital balances were:

$

Steve 150,000

Paul 75,000

On 1 December 2008 Paul introduced a further $75,000 capital, and Steves salary was discontinued. The partnership

profit for the year ended 31 May 2009 was $228,250.

Wa was Svs a sa ya 31 may 2009?

A $100,000

B $99,000

C $122,625

d $105,625

(2 aks)

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10 At 31 May 2008 Stoneacres capital structure was as follows:

$

Ordinary share capital (1,000,000 shares of 25c each) 250,000

Share premium account 200,000

In the year ended 31 May 2009 Stoneacre made a rights issue of 1 share for every 2 held at $1 per share and this

was taken up in full.

Later in the year Stoneacre made a bonus issue of 1 share for every 10 held, using the share premium account for the

purpose.

Wa was cays caa sc a 31 may 2009?

Ordinary share capital Share premium account

$ $

A 387,500 187,500

B 412,500 537,500

C 387,500 550,000

d 400,000 550,000

(2 aks)

e Sa qss

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Answers

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Sa m Cc qs pa t6(uK) Asws

da faca Sas

1 B

$

Opening balance 7,500Profit share (100,000 x 3/5) 60,000Drawings (9,200)

Closing current account balance 58,300

2 d

$Cost of investment 6,000,000Share capital ($5m x 60%) (3,000,000)Retained earnings ($450,000 x 60%) (270,000)

Goodwill 2,730,000

3 C

4 A

5 d 628,950 + (76,950 31,725) (66,525 36,300) = 643,950

6 A

7 A

8 d

9 CSteve Paul

$ $ $

Profit 228,250Salary (30,250 x ) 15,125 (15,125)Interest on capital (150,000 x 5%) 7,500 (7,500)(75,000 x 5% x ) 1,875(150,000 x 5% x ) 3,750 (5,625)

Profit share 100,000 100,000 200,000Total profit share 122,625 105,625

10 BShare capital Share premium

$ $Opening balance 250,000 200,000Rights issue (1,000,000 x 1/2 x 25c)

(1,000,000 x 1/2 x 75c) 125,000 375,000Bonus issue (1,500,000 x 1/10 x 25c)

(1,500,000 x 1/10 x 25c) 37,500 (37,500)Total 412,500 537,500