Accounting Assignment



Extracts from CFQ’s Statement of financial position at 31 March 2013, with comparatives

appear below:

31 March 2013 31 March 2012

$million $million

Property, plant and equipment 635 645

Non-current asset investments at fair value 93 107

Deferred development expenditure 29 24

During the year to 31 March 2013, CFQ sold property, plant and equipment for $45m. It had

originally cost $322m and had a carrying value of $60m at the date of disposal.

CFQ’s statement of profit or loss for the year ended 31 March 2013 included:

depreciation of property, plant and equipment of $120m;

amortisation of deferred development expenditure of $8m;

revaluation loss on investments of $21m.


Ace is a management accountant working as part of a small team that has been set up by ZY,

his employer, to evaluate tenders submitted for contracts being awarded by ZY.

He has just discovered that one of the other team members accepted large payments in

exchange for information, from an entity at the time it was considering tendering. Ace

suspects that this may have influenced the winning tender submitted by the entity.


Prepare the cash flows from the investing activities section of CFQ’s statement of cash

flows for the year ended 31 March 2013.

Total for sub-question (a) = 5 marks)


Explain the steps that Ace could follow to ensure that he adheres to CIMA’s code of

ethics for professional accountants.

(Total for sub-question (b) = 5 marks)Financial Operations 7 May 2013


On 1 January 2012 PS issued at par, 500,000 $1 5% cumulative preferred shares,

redeemable at par in four years. The issue costs were $20,000.

PS has not issued preferred shares before and the managing director has asked you to

explain how the preferred shares should be treated in the financial statements of PS.


GH, an entity operating in Country X, purchased plant and equipment on 1 April 2011 for

$260,000. GH claimed first year allowances and thereafter annual writing down allowances.

GH depreciates plant and equipment over 6 years, using the straight line method, assuming a

10% residual value.

Section B continues on the next page



Explain with reasons, how PS should:

(i) classify the preferred shares in its financial statements for the year ended 31 December

2012, in accordance with IAS 32 Financial Instruments: Presentation;

(ii) account for the related costs in accordance with IAS 39 Financial Instruments:

Recognition and Measurement.

(Total for sub-question (c) = 5 marks)


(i) Define the meaning of the tax base of an asset and its significance for deferred tax.

(2 marks)

(ii) Calculate the amount of the deferred tax provision that GH should include in its

statement of financial position as at 31 March 2013 in respect of this plant and


(3 marks)

(Total for sub-question (d) = 5 marks)May 2013 8 Financial Operations


MT’s summarised statement of profit or loss for the year ended 31 March 2013 is as follows:


Gross profit 187,000

Administrative expenses (126,000)

Distribution costs (22,000)


Finance cost (2,000)

Profit before tax 37,000

Administrative expenses include donations to the local ruling political party of $5,000 and

depreciation of property, plant and equipment of $39,000 (inclusive of depreciation of new


MT an entity operating in Country X made a tax loss for the year ended 31 March 2012. The

loss carried forward at 31 March 2012 was $12,000.

At 31 March 2012 MT’s tax written down value of its property, plant and equipment was

$120,000. All of these assets qualified for the annual tax depreciation allowances. MT

purchased property, plant and equipment during the year to 31 March 2013 for $30,000.


Calculate the amount of tax that MT is due to pay for the year ended 31 March 2013

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