FA New Mock 2024

At 1 January 20X6, the following opening balances were recorded in the books of Zephyr Co:

(1) Motor vehicles - cost: $190,000

(2) Motor vehicles - accumulated depreciation: $40,000

During the year ended 31 December 20X6, the following transactions took place:

(1) Additions of motor vehicles with a cost of $30,000

(2) Disposal of motor vehicles with a cost of $80,000 and accumulated depreciation of $20,000

(3) Depreciation (motor vehicles) expense for the year: $28,000

What is the carrying amount of motor vehicles shown in Zephyr Co's statement of financial position at 31 December 20X6?

• $142,000.

• $152,000.

• $154,000.

• $138,000.

Cypress Co has the following equity balances at 1 July 20X8:

(1) Ordinary shares of $0.20 each: $300,000

(2) Share premium: $50,000

(3) Retained earnings: $75,000

On 30 June 20X9, Cypress Co made a rights issue of one share for every ten shares currently in issue. The rights issue price was $1.40. The market price of a Cypress Co share at the date of the rights issue was $1.80.

Which of the following is the correct journal to record the rights issue?

 

• Dr Bank $42,000 Cr Share capital $30,000 Cr Share premium $12,000

• Dr Bank $270,000 Cr Share capital $30,000 Share premium $240,000

• Dr Bank $210,000 Cr Share capital $30,000 Dr Bank $180,000

• Cr Share capital $210,000 Cr Share Capital $210,000

3 Which of the following bodies are supervised by the IFRS Foundation?

 

(1) International Accounting Standards Board (IASB)

(2) IFRS Interpretations Committee

• 1 only

• 2 only

• Both 1 and 2

• Neither 1 nor 2

On 1 August 20X8, Louise had an opening accrual of $600 on her rent account, which was owed from the previous year. On 1 October 20X8, Louise paid $4,500 rent for the period from 1 June 20X8 to 31 August 20X9. What amounts should be included in the financial statements in relation to the rent for the year ended 31 July 20X9?

• Rent expense $4,500 Prepayment $300

• Rent expense $3,600 Prepayment $300

• Rent expense $4,500 Accrual $600

• Rent expense $4,500 Accrual $300

The debit and credit columns of Accordion Co's trial balance did not agree. A debit balance of $25,950 was entered in a suspense account, and the following errors were subsequently identified:

(1) A cheque received for $1,900 had been correctly posted to the cash account and posted to the receivables ledger as $9,100.

(2) Rent paid of $6,500 had been posted correctly to the cash account and posted to rent expense as $650.

(3) No entries had been made to reflect a cash sale of $1,000.

What is the remaining debit balance on the suspense account after making adjustments for the above errors?

• $24,600

• $25,700

• $25,600

• $26,600

On 31 December 20X8, all of Webster's inventory was destroyed by fire. The following information is available:

(1) Inventory at 1 January 20X8 was valued at $26,950.

(2) Purchases for the year to 31 December 20X8 were $84,500.

(3) Sales for the year to 31 December 20X8 were $125,200.

(4) The gross profit margin on sales revenue was 30%.

What was the value of inventory destroyed in the fire?

• $175,280

• $175,270

• $178,280

• $175,289

Which TWO of the following factors would be relevant when accounting for an associate?

(A) An entity must have significant influence over an associate.

(B) An entity must own greater than 50% of the shares of its associate.
(C) An entity must have control over an associate.

(D) A shareholding of 20% to 50% in an entity is assumed to represent significant influence.

• A & B

• A & D

• C & D

• B & C

Allred's cash book shows a credit balance of $100 brought down at the end of March 20X7. The bank statement shows a debit balance of $100 at the same date. What does this balance represent?

• The total of cash paid out by Allred in March is $100.

• Allred received cash of $100 in March.

• Allred has money at the bank.

• Allred has an overdraft at the bank.

Styx Co is being sued by a customer for providing negligent consultancy services. At the year-end, Styx Co's legal advisors have advised Styx Co that there is a possibility that the claim will succeed and that if the claim is successful, the company will have to pay $50,000 in compensation. The legal advisors have also stated that their legal fees will be $10,000, irrespective of whether the claim is successful or not. How will this claim be treated in the financial statements of Styx Co?

• The possible compensation should be provided for, and the legal costs should be disclosed in the notes.

• The legal costs should be provided for, and the possible compensation should be disclosed in the notes.

• The legal costs and compensation should be disclosed in the notes.

• The legal costs and compensation should be provided for.

Maelstrom Co sold goods with a list price of $27,500 to Cyclone Co on 17 January 20X1, with credit terms of 30 days. As Cyclone Co makes significant purchases from Maelstrom Co, Cyclone Co receives a trade discount of 5% on all purchases. Maelstrom Co also offered a further 4% settlement discount if the invoice is settled within seven days. Cyclone Co has a history of paying promptly, and at the date of sale, Maelstrom Co expected that Cyclone Co would take advantage of the settlement discount. Cyclone Co settled the invoice on 21 January 20X1. What is the journal entry required to record the cash receipt on 21 January 20X1?

• Dr Cash $25,080 Dr Sales $1,045 Cr Receivables $26,125

• Dr Cash $25,080 Cr Receivables $25,080

• Dr Cash $25,025 Dr Sales $2,475 Cr Receivables $27,500

• Dr Cash $25,025 Cr Receivables $25,025