AFA IIPl III Question Dec 2016
AFA IIPl III Question Dec 2016
AFA IIPl III Question Dec 2016
Page 1 of 4
CMA DECEMBER, 2016 EXAMINATION
PROFESSIONAL LEVEL-III
SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II.
Q. No. 2. (cont’d……)
5. November 1—A total of 24,000 shares of common stock were purchased on the open
market at Tk. 9 per share. These shares were to be held as treasury stock and were still
in the treasury as of December 31, 2013.
6. Common stock cash dividends—Cash dividends to common stockholders were declared
and paid as follows.
April 15— Tk. 0.30 per share
October 15— Tk. 0.20 per share
7. Cash dividends to preferred stockholders were declared and paid as scheduled.
Required:
(i) Determine the number of shares used to compute basic earnings per share for the year
ended December 31, 2013.
(ii) Determine the number of shares used to compute diluted earnings per share for the year
ended December 31, 2013.
(iii) Compute the adjusted net income to be used as the numerator in the basic earnings per
share calculation for the year ended December 31, 2013.
[Marks: (10+6+4) = 20]
Q. No. 3.
(a) State the rules for applying foreign exchange rate in case of Non-integral operation.
(b) Farial limited, a company in Bangladesh has a branch in Singapore managed by a local agent.
The Product are sent to the Branch and invoiced at cost plus freight. Packing materials are
purchased locally by the Branch. The Branch keeps a complete set of books in the local
currency – Sin$. The Trial balance of Branch as at December 31, 2016 was as under:
Items Sin$ (Debit) Sin$ (Credit)
Purchases :
Raw material 43,300
Packing 30,240
Sales 1,40,800
Wages 11,530
General expenses 10,440
Balance at Bank 29,130
Stock as at January 01, 2016:
Raw material 17,640
Packing 5,890
Balance due from local agent 18,210
Head office account :
Balance at January 01, 2016 14,900
Raw materials from head office 43,300
Remittance to head office on June 30 17,800
Remittance to head office on December 31 20,000
Creditors 5,180
Total 2,04,180 2,04,180
The currency being relatively stable, a fixed exchange rate of 1 Sin$ = Tk. 40 is adopted for
accounting between the Head office and the Branch except for remittances. The Taka value of the
remittances at June 30 was Tk. 7,00,000 and on December 31 was Tk. 7,92,000. On December 24,
2016 Head office debited the Branch with Tk. 1,60,000 in respect of a shipment of raw material which
was in- transit on December 31, 2016. The remittance of Sin $ 20,000 from the Branch was not
received at Head office until January 03, 2017. The agent is entitled to a 10% commission on the net
profit of the Branch before charging either such commission or any profit or loss on exchange.
Page 2 of 4
CMA DECEMBER, 2016 EXAMINATION
PROFESSIONAL LEVEL-III
SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II.
Q. No. 3. (cont’d……)
Stock at the Branch on December 31, 2016:
Item Sin$
Raw material 6,560
Packing material 6,480
Required:
(i) Provide the necessary entries in the head office books to bring down the balance of
Branch account as at January 01, 2017.
(ii) Prepare Branch profit and loss account in Taka for the year ended on December 31,
2016.
[Marks: 5+(5+10) = 20]
Q. No. 4.
(a) Considering following ethical threats, state the possible safeguards for each:
(i) The accountant being paid a bonus based on the financial statement results.
(ii) The accountant may be pressurized to provide misleading /false information.
(b) Radisson is an international hotel group that reports to management on the basis of region. It is
a public limited company and does not currently report segmental information under IFRS-8.
The results of the regional segments for the year ended June 30, 2016 are as follows:
Revenue
Region External Internal Profit/(loss) Asset Liabilities
Dhaka 200 3 (10) 300 200
Chittagong 300 2 60 800 300
Other Areas 500 5 105 2,000 1,400
(* All figures are in million Taka*)
There were no remarkable significant intercompany balances in the segment assets and
liabilities.The hotels are located in city areas and the company sets individual performance
indicators for each hotel.
Required:
Using the information given above apply the principles stated in IFRS-8 and determine the
reportable operating segments for Radisson.
[Marks: (5+5)+10 = 20]
Q. No. 5.
The draft statements of financial position of Hulk Co, Molehill Co and Pimple Co as at 31 May
20X5 are as follows.
Hulk Co Molehill Co Pimple Co
Tk. Tk. Tk. Tk. Tk. Tk.
Assets
Non-current assets
Tangible assets 90,000 60,000 60,000
Investments in
subsidiaries (cost)
Shares in Molehill Co 90,000 - -
Shares in Pimple Co 25,000 42,000 -
115,000 42,000 -
205,000 102,000 60,000
Current assets 40,000 50,000 40,000
245,000 152,000 100,000
Page 3 of 4
CMA DECEMBER, 2016 EXAMINATION
PROFESSIONAL LEVEL-III
SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II.
Q. No. 5. (cont’d……)
Non-current liabilities
12% loan - 10,000 -
195,000 112,000 75,000
Current liabilities
Payables 50,000 40,000 25,000
245,000 152,000 100,000
(a) Hulk Co acquired 60% of the shares in Molehill on 1 January 20X4 when the balance on
that company’s retained earnings was Tk. 8,000 and there was no share premium
account.
(b) Hulk acquired 20% of the shares of Pimple Co and Molehill acquired 60% of the shares of
Pimple Co on 1 January 20X4 when that company’s retained earnings stood at Tk.
15,000.
(c) There has been no payment of dividends by either Molehill or Pimple since they became
subsidiaries.
(d) There was no impairment of goodwill.
(e) It is the group’s policy to measure the non-controlling interest at acquisition at its
proportionate share of the fair value of the subsidiary’s net assets.
Required:
Prepare the consolidated statement of financial position of Hulk Co as at 31 May 20X5.
[Marks: 20]
= THE END =
Page 4 of 4