Single Entity

Question 1

Lease Liabilities

Answer 1

Ignore the Dr Lease Liability, Cr Bank Payment, but still recognise the Dr Finance Cost, Cr Lease Liability to recognise as amortised cost

Question 2

Contract Asset

Answer 2

On the SoPL workings, The Revenue simply get’s pushed to Revenue
The CoS is made up of Materials and Depreciation

Question 3

If Deferred Tax C/B not given

Answer 3

The C/B will usually be the Tax base above or below carrying value as well the deferred tax on revaluation surplus - This goes to SoFP

Ensure the P&L charge of deferred tax that goes into Income tax has the revaluation removed again

Question 4

IF Dividend issued in year has gone to another expense account

Answer 4

Cr that expense account on the SoPL so it only goes to retained earnings

Question 5

If there’s spend such as Labour, materials, production overheads

Answer 5

These will be Dr Asset, Cr CoS, ensure to remove from CoS value

Question 6

Dividend Yield

Answer 6

Annual DPS/Share price =Dividend Yield

Question 7

Fraud current and prior year

Answer 7

Prior year: Add a row on the SoCIE to restate the O/B
Current year: add to Admin Expenses unless told otherwise

Question 8

Investments Gain/Losses

Answer 8

Dr Gain on Investment in the SoPL

Question 9

Rights Issue SoPL Single Entity

Answer 9

Calculate no. of shares e.g. 50 cent = /0.5
Split between Share capital and premium from the price of rights issue

Question 10

Excess Depn Surplus Reval

Answer 10

Balance off against eachother in the SoCIE
Dr Reval Surplus, Cr Retained Earnings

Question 11

Maturing Inventory

Answer 11

Remove the proceeds (Revenue) from where it’s been booked and place in Non-Current Liabilities as a Loan
Charge Interest on the loan

Put the cost back into Inventory, Dr Inventory, Cr CoS

Question 12

Assets held for sale

Answer 12

Depreciate until held for sale - classify as a different asset and stop depreciation