1 ) The journal entry required at the removal of existing accumulated depreciation prior to revaluation.

a. Loss on devaluation-Plant (Dr), Accumulate depreciation- plant (Dr), Plant (Cr)

b. Plant (Dr), Accumulated Depreciation- Plant (Cr)

c. None of the answers given

d. Depreciation expense-Plant (Dr), Accumulated Depreciation- Plant (Cr)

2 ) The main movements in the retained earnings account are

a. Changes in accounting policy and errors

b. All of the answers given

c. Transfers to and from reserves

d. Dividends paid or declared

3) Micro Ltd purchases a new car costing $50 000 with an estimated useful life of four years and a residual value of $10 000. Calculate the written down value of car after 2 years.

a. $25000

b. $28000

c. $35000

d. $30000

4). The journal entry required to record the tax effect of the revaluation.

a. Deferred tax Asset (Dr), Deferred tax liability (Cr)

b. Deferred tax liability (Dr), Income tax expense (Cr)

c. None of answers given

d. Income tax expense (Dr), Deferred tax liability (Cr)

5). ABC Ltd purchases a 100 per cent interest in XYZ Ltd. The cost of the acquisition is $1 600 000 plus associated legal costs of $80 000. As at the date of acquisition, the statement of financial position of XYZ Ltd shows total assets $2,000,000 and total liabilities $1,000,000. Calculate the net assets of XYZ Ltd.

a. $1,000,000

b. $500,000

c. $2000,000

d. None of the answers given

6). On 1 July 2021 the directors of XYZ decided to forfeit the 12,000 shares in respect of which the call of $2.50 was not made. The shares were cancelled and reissued as fully paid to $5 per share on payment of $4 per share. Costs of $800 were incurred to reissue the shares. What journal entry needs to be recorded for cancellation of forfeited shares?

a. Cash (Dr) Forfeited shares liability (Dr) Share capital (Cr)

b. Cash (Dr) Forfeited shares liabilities (Cr) Share capital (Cr)

c. None of the answers given

d. Forfeited shares liability (Dr) Cash (Cr)

7). An asset with a fair value of $170 is leased. The lease agreement is for 4 payments made in advance of $50 each year. Calculate the implicit interest rate if there is no residual. Initial recognition?

a. None of the answers given

b. 20%

c. 10%

d. 18%

8). Lease payments are amounts the lessee pays to the lessor during the period of the lease include

a. Unguaranteed residual

b. Penalties for termination

c. None of the answers given

d. Maintenance, insurance, taxes

9). Examples of reserves other than retained earnings include

a. Retained profit

b. Share capital

c. None of the answers given

d. Asset revaluation surplus

10). David Ltd purchases a 100 per cent interest in Roger Ltd. The cost of the acquisition is $1 500 000 plus associated legal costs of $80 000. As at the date of acquisition, the statement of financial position of Roger Ltd shows net assets $5,000,000. Determine, for accounting purposes, the amount of goodwill that has been acquired by Roger Ltd.

a. $40000

b. $35000

c. None of the answers given

d. $30000