Questions and answers: CPA Financial Reporting

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134 Questions  View: All | Solved | Unsolved

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• In February 2007, the International Accounting Standing Board ( IASB) published for comment an exposure draft of a proposed International Financial Reporting Standard (IFRS) for...(Solved)
  

  In February 2007, the International Accounting Standing Board ( IASB) published for comment an exposure draft of a proposed International Financial Reporting Standard (IFRS) for small and Medium Enterprises( SMEs). Required: i) Outline three benefits that SMEs will derive from adopting IFRS. ii) Highlight three challenges that could face SMEs in complying with IFRS.

  Date posted: February 13, 2019.  

• The approved estimates and actual expenditure details for the Ministry of Planning and Development for the year 2001/2002 were as follows: Prepare: (i) The General Account of...(Solved)
  

  The approved estimates and actual expenditure details for the Ministry of Planning and Development for the year 2001/2002 were as follows: Prepare: (i) The General Account of Vote. (ii) The Exchequer Account (iii) The Paymaster General Account. (iv) Statement of assets and liabilities as at 30 June 2002.

  Date posted: February 13, 2019.  

• The following are details relating to approved estimates and actual expenditure for a certain government department for the financial year ended 30 June 2003 Prepare: i) Paymaster...(Solved)
  

  The following are details relating to approved estimates and actual expenditure for a certain government department for the financial year ended 30 June 2003 Prepare: i) Paymaster general account. ii) Exchequer account. iii) General account of vote iv) Statement of assets and liabilities as at 30 June 2003.

  Date posted: February 13, 2019.  

• Briefly explain the following terms in relation to government accounting: (i) Exchequer over issues. (ii) Paymaster General (iii) Vote on account. (iv) Commitment accounting.(Solved)
  

  Briefly explain the following terms in relation to government accounting: (i) Exchequer over issues. (ii) Paymaster General (iii) Vote on account. (iv) Commitment accounting.

  Date posted: February 13, 2019.  

• The approved Estimates and Actual Expenditure details for vote E45 of ministry ABC for the financial year 2004/2005 were as follows: Required: a) Appropriation account for the...(Solved)
  

  The approved Estimates and Actual Expenditure details for vote E45 of ministry ABC for the financial year 2004/2005 were as follows: Required: a) Appropriation account for the year ended 30 June 2005 b) General Account of vote for the year ended 30 June 2005. c) Exchequer Account for the year ended 30 June 2005 d) Paymaster General (PMG) account for the year ended 30 June 2005 e) Statement of assets and liabilities as at 30 June 2005.

  Date posted: February 13, 2019.  

• The following details were extracted from the books of receivers of revenue for the year 2008/2009 Prepare Statement of revenue for the year ended 30 June...(Solved)
  

  The following details were extracted from the books of receivers of revenue for the year 2008/2009 Prepare Statement of revenue for the year ended 30 June 2009

  Date posted: February 13, 2019.  

• The following information relates to Government of Country “Y” for the year ended 30 June 2009. Prepare a consolidated statement of cash receipts and payments for...(Solved)
  

  The following information relates to Government of Country “Y” for the year ended 30 June 2009. Prepare a consolidated statement of cash receipts and payments for the year ended 30 June 2009, in conformity with International Public Sector Accounting Standard on Financial Reporting under the Cash Basis of Accounting.

  Date posted: February 13, 2019.  

• The directors of Kumba Ltd. are reviewing the draft financial statements of the company for the year ended 30 June 2009. Various matters relating to...(Solved)
  

  The directors of Kumba Ltd. are reviewing the draft financial statements of the company for the year ended 30 June 2009. Various matters relating to the financial statements require to be concluded before the financial statements are approved by the directors. Required: Explain how the following matters relating to the financial statements of Kumba Ltd. should be dealt with, stating in each case the relevant accounting standard: i. After the balance sheet date, one of the factories was seriously damaged by fire. The insurance company has agreed to cover only part of the loss. The company's going concern is not affected. ii. Kumba Ltd. guaranteed another company in 2007. No disclosure has been made in previous financial statements, but events in the latter part of 2009 suggest that the liability will fall on Kumba Ltd. in the year ending 30 June 2010.

  Date posted: February 13, 2019.  

• Wepesi Ltd. has been making losses for the last four years. The management the company has developed an exit loss making activity will be discontinued....(Solved)
  

  Wepesi Ltd. has been making losses for the last four years. The management the company has developed an exit loss making activity will be discontinued. The management intends to implement the measures from. The management expects to reverse the losses over the next two years following the implementation of the exit plan. The management proposes that a deferred tax asset is recognized in respect of the losses incurred using the exit plan to justify the recognition of the deferred tax asset. The management is preparing the financial statements for the year ended 31st May 2010. The current date is 7th June 2010 and the plan has not yet been made public i. With respect to the International Accounting Standard IAS 12, Income Taxes, argue the case for or against recognition of the deferred tax asset n the financial statements of Wepesi Ltd. For the year ended 31st May 2010. ii. Explain the factors you would take into consideration in assessing the likelihood of the projected profits being realized by Wepesi Ltd.

  Date posted: February 13, 2019.  

• Briefly explain the following Committees. i. Public Accounts Committee. ii. Public Investments Committee.(Solved)
  

  Briefly explain the following Committees. i. Public Accounts Committee. ii. Public Investments Committee.

  Date posted: February 13, 2019.  

• The following revenue was collected by the Ministry of Finance in the financial year 2009/2010 in respect of Revenue Head 130-070-Other Taxes: Prepare: i. Extracts from the...(Solved)
  

  The following revenue was collected by the Ministry of Finance in the financial year 2009/2010 in respect of Revenue Head 130-070-Other Taxes: Prepare: i. Extracts from the statement of assets and liabilities as at 30 June 2010 in respect of items for Revenue Head 130-070-Other Taxes. ii. Statement of Revenue for the year ended 30 June 2010. iii. List two items which should be shown by way of footnotes to the statements

  Date posted: February 13, 2019.  

• Outline the powers of the Auditor General in the exercise of his duties(Solved)
  

  Outline the powers of the Auditor General in the exercise of his duties

  Date posted: February 13, 2019.  

• The following information was extracted from the books of the Ministry of Commerce and Industrialization for the fiscal year ended 30 June 2011: Prepare: (i) Statement of...(Solved)
  

  The following information was extracted from the books of the Ministry of Commerce and Industrialization for the fiscal year ended 30 June 2011: Prepare: (i) Statement of financial performance for the year ended 30 June 2011. (ii) Statement of financial position as at 30 June 2011.

  Date posted: February 13, 2019.  

• Explain two requirements that should be met for government grants to be recognized in the financial statements in the context of International Accounting Standard (IAS)...(Solved)
  

  Explain two requirements that should be met for government grants to be recognized in the financial statements in the context of International Accounting Standard (IAS) 20.

  Date posted: February 13, 2019.  

• In the context of International Accounting Standard (1AS) 21, distinguish between the accounting treatment for foreign currency transactions "on initial recognition" and "at the end...(Solved)
  

  In the context of International Accounting Standard (1AS) 21, distinguish between the accounting treatment for foreign currency transactions "on initial recognition" and "at the end of subsequent reporting periods".

  Date posted: February 13, 2019.  

• The following information was extracted from the books of a government entity for the year ended 30 June 2011: Prepare Statement of financial performance for the...(Solved)
  

  The following information was extracted from the books of a government entity for the year ended 30 June 2011: Prepare Statement of financial performance for the year ended 30 June 2011

  Date posted: February 13, 2019.  

• The following information was compiled by the Ministry of Finance for the fiscal year ended 30 June 2012. Prepare Budget out-turns for the Ministry of Finance...(Solved)
  

  The following information was compiled by the Ministry of Finance for the fiscal year ended 30 June 2012. Prepare Budget out-turns for the Ministry of Finance in accordance with International Public Sector Accounting Standard (IPSASs 24).

  Date posted: February 13, 2019.  

• List the circumstances under which a subsidiary should be excluded from the consolidated financial statement(Solved)
  

  List the circumstances under which a subsidiary should be excluded from the consolidated financial statement

  Date posted: February 12, 2019.  

• Explain four circumstances in which a parent company is exempted from consolidating investments in subsidiaries in accordance with International Accounting Standards (IAS)27- Consolidated and separate...(Solved)
  

  Explain four circumstances in which a parent company is exempted from consolidating investments in subsidiaries in accordance with International Accounting Standards (IAS)27- Consolidated and separate financial statements

  Date posted: February 12, 2019.  

• Auma Ltd. acquired 80% of the ordinary shares of Sakwa Ltd. on 31 October 2009 for Sh. 117 million. At this date, the net assets...(Solved)
  

  Auma Ltd. acquired 80% of the ordinary shares of Sakwa Ltd. on 31 October 2009 for Sh. 117 million. At this date, the net assets of Sakwa Ltd. were Sh. 127.5 million. The fair value of the non-controlling interest on the acquisition date was Sh.28.5 million. Calculate the value of goodwill using the two methods

  Date posted: February 12, 2019.  

• Distinguish between the full method and the partial method of determining goodwill arising on acquisition of a subsidiary company(Solved)
  

  Distinguish between the full method and the partial method of determining goodwill arising on acquisition of a subsidiary company

  Date posted: February 12, 2019.  

• Briefly explain three circumstances in which a parent company need not present consolidated financial statements in accordance with International Accounting Standard (IAS ) 27 ,Consolidated...(Solved)
  

  Briefly explain three circumstances in which a parent company need not present consolidated financial statements in accordance with International Accounting Standard (IAS ) 27 ,Consolidated and Separate financial Statements

  Date posted: February 12, 2019.  

• Differentiate between full consolidation and equity method of accounting for subsidiaries and associate companies(Solved)
  

  Differentiate between full consolidation and equity method of accounting for subsidiaries and associate companies

  Date posted: February 12, 2019.  

• International Accounting Standard (IAS) 28, Investment in Associates prescribes the use of the equity method of accounting for investments in associates over which the investor...(Solved)
  

  International Accounting Standard (IAS) 28, Investment in Associates prescribes the use of the equity method of accounting for investments in associates over which the investor has significant influence. Required: i) Describe the term "significant influence" in the context of IAS 28. ii) Explain four circumstances under which the investor is exempted from use of the equity method.

  Date posted: February 12, 2019.  

• Explain the circumstances in which an entity is permitted to change its accounting policies.(Solved)
  

  Explain the circumstances in which an entity is permitted to change its accounting policies.

  Date posted: February 12, 2019.  

• What meetings of creditors must be held and for what purpose in the course of a creditors’ voluntary winding up?(Solved)
  

  What meetings of creditors must be held and for what purpose in the course of a creditors’ voluntary winding up?

  Date posted: February 12, 2019.  

• The following trial balance was extracted from the books of ABC Retirement Benefits Scheme for the year ended 30 September 2003: Prepare: (i) Statement of changes in...(Solved)
  

  The following trial balance was extracted from the books of ABC Retirement Benefits Scheme for the year ended 30 September 2003:

  Date posted: February 12, 2019.  

• Briefly explain the meaning of the term “abatement”(Solved)
  

  Briefly explain the meaning of the term “abatement”

  Date posted: February 12, 2019.  

• The following trial balance was extracted by the trustees of XYZ Retirement Benefit Scheme as at 31 May 2007 Prepare: (i) Statement of changes in net assets...(Solved)
  

  The following trial balance was extracted by the trustees of XYZ Retirement Benefit Scheme as at 31 May 2007

  Date posted: February 12, 2019.  

• Prepare: i) Statement of changes in net assets for the year ended 31 March 2011. ii) Statement of net assets as at 31 March 2011(Solved)
  

  The following trial balance was extracted from the books of Juhudi Retirement Benefits Scheme as at 31 March 2011:

  Date posted: February 11, 2019.