First Question

. Amy Ltd was registered as a company on 1 July 2019. On 8 July 2019, Amy Ltd issued a prospectus offering 200 000 ordinary shares at an issue price of $5.00 each, payable $3.00 on application and $2.00 on allotment. Applications closed on 1 September 2019 with the company having received applications for 220 000 shares. After application but prior to allotment, the balance in the application account would be:

A.$660 000 debit

B. $600 000 credit

C.$1 000 000 credit

D. $660 000 credit

Second Question

Kelvin Ltd purchased a state-of-the-art hedge trimming tractor for a contract to maintain country roadside hedges for a local council. The manufacturer of the tractor stated in marketing material that the tractor is able to trim 700 000 kilometres of hedges in its operating life. Kelvin Ltd believes that the particularly woody type of hedges they have been contracted to maintain means that the life of the tractor is likely to be 15 per cent less than the manufacturer specified. The tractor cost $100 000 and is expected to have a salvage value at the end of its useful life of $30 000. The tractor trimmed 60 000 kilometres this period. What is the depreciation charge for this period (rounded to the nearest dollar)?

A.$9 524

B.$10 084

C. $7 059

D. $6 000

Third question

Amsterdam Ltd has recently acquired a machine that cost $29 000. The machine normally remains productive for six years. It is expected to continue in the production process at Amsterdam Ltd for eight years due to the excellent maintenance and operating policies in place at Amsterdam Ltd. The machine has the capacity to produce 20 000 units over a six-year life and 27 000 units over an eight-year life. Its salvage value after six years is expected to be $2 500 and after eight years $1 000. What depreciation would be charged in the first year of the machine's operation when 4 000 units were produced (rounded to the nearest dollar)?

A. $4148

B. $5600

C. $5300

D.$4296

FOurth question

Where non-current assets are revalued upwards, an adjustment for which of the following should also be made in accordance with AASB 112?

A. Property tax

B. Goodwill

C. None of the given answers are correct.

D Deferred tax

Fifth question

Arenus Ltd purchased an asset six years ago for $75 000. At that time it was deemed to have a residual value of $15 000 and estimated useful life of six years. After four years of use, the asset was overhauled at a cost of $35 000. The overhaul extended the useful life of the asset by four more years but reduced its residual value to $7 000. Assuming the straight-line method of depreciation is applied; calculate the depreciation expense in the year after the overhaul (rounded to the nearest dollar)?

A.$8 000

B.$10 500

C.$10 000

D. $8 800

Sixth question

Bennnna Ltd recorded as an asset a piece of equipment purchased for $13 000 this period. No depreciation has been recorded as yet and it has been revealed that it is not probable that the equipment will generate future economic benefits. What is the most appropriate accounting entry?

A.Dr Depreciation expense - equipment (P/L) 13 000

Cr Accumulated depreciation - equipment 13 000

B.Dr Equipment 13 000

Cr PPE written off (P/L) 13 000

C. Dr Accumulated depreciation - Equipment 13 000

Cr Depreciation expense- equipment (P/L) 13 000

D.Dr PPE written off (P/L) 13 000

Cr Equipment 13 000

Seventh question

Sinhong Ltd purchased (non-depreciable) land for $750 000 six years ago. It was revalued on 31 December 2019 to $600 000. A subsequent revaluation on 31 December 2018 found the market value to be $900 000 due to a change in council zoning for the area. What are the journal entries (ignoring deferred tax) required to record the revaluations on 31 December 2017 and 31 December 2018?

A. 31-Dec-2017

Dr Land 150 000

Cr Asset revaluation reserve 150 000

31-Dec-2028

Dr Asset revaluation reserve 300 000

Cr Land 300 000

B. 31-Dec-2017

Dr Loss on revaluation of land (P/L) 150 000

Cr Land 150 000

31-Dec-2018

Dr Land 300 000 Cr Gain on revaluation of land (P/L) 150 000

Cr Asset revaluation reserve 150 000

C. 31-Dec-2017

Dr Loss on revaluation of land (OCI) 150 000Cr Land 150 000

31-Dec-2018

Dr Land 150 000

Cr Asset revaluation reserve 150 000

D. 31-Dec-2017

Dr Loss on revaluation of land (P/L) 150 000

Cr Land 150 000

31-Dec-2018

Dr Land 300 000

Cr Asset revaluation reserve 300 000

Eight question

A machine purchased by Rhythm Ltd had a cost of $670 000 and an accumulated depreciation balance of $120 000 at 30 June 2020. Its fair value is assessed at this time, with its first revaluation as $450 000. What is/are the appropriate journal entry(ies) to record the revaluation using the net method? Ignore tax consequences.

A. Dr Loss on revaluation of machine (P/L) 220 000

Cr Machine 220 000

B. Dr Accumulated depreciationmachine 120 000

Cr Machine 120 000

Dr Asset revaluation surplus 100 000

Cr Machine 100 000

C. Dr Accumulated depreciationmachine 120 000

Cr Machine 120 000

Dr Asset revaluation reserve 100 000

Cr Gain on revaluation machine 100 000

D. Dr Accumulated depreciationmachine 120 000

Cr Machine 120 000

Dr Loss on revaluation - machine (P/L) 100 000

Cr Machine 100 000

Nine question

The constitution of Pilli Ltd requires approval of final dividends by shareholders at the Annual General Meeting before these can be declared or paid. Pilli Ltd has a 30 June year end. What is the accounting treatment or general journal entry for the following statement?

On 2 July 2020, the directors recommended a final dividend of $180 000 from retained earning

A. Dr. Cash

Cr. Retained earnings

B. Dr. Retained earnings

Cr. Cash

C. Dr. Retained earnings

Cr. Dividend payable

D. There is no entry as the dividend has not been declared, only recommended

Ten question

On 22 April 2009, the directors decided to transfer $50 000 from the revaluation surplus to the general reserve and $30 000 from the general reserve to the retained earnings. What are the general journal entries to record these transactions?

A. Dr. Revaluation Surplus$50 000

Dr. General Reserve$30 000

Cr. Retained Earnings $80 000

B. Dr. Revaluation Surplus$50 000

Cr. General Reserve$20 000

Cr. Retained Earnings$30 000

C. Dr. General reserve$50 000

Cr. Revaluation Surplus$20 000

Cr. Retained Earnings$30 000

D. Dr. Revaluation Surplus$50 000

Cr. General Reserve$30 000

Cr. Retained Earnings$20 000

Eleven question

Which of the following assets and liabilities recorded in the statement of financial position are exposed to a Deferred tax asset consequence?

A. Prepaid rent

B. Revalued land

C. Interest receivable

D. Unearned revenue

Thirteen question

Ahandi Ltd has acquired a new building. Which of the following items should not be included in the cost of the building?

A.Architect's fees

B.Cost of changing the parking bays

C.Real estate's agent's fees

D.Stamp duty paid on the purchase of the building

Fourteen question

Amelia Ltd paid $290 to replace a damaged bumper bar on Truck A. What is the most appropriate accounting treatment for this situation?

A. No journal entry is required

B. No adjusting entry is required but require a disclosure as a note to the financial statements

C. Dr. Repairs and maintenance $290

Cr. Cash$290

D. Dr. Truck A$290

Cr. Cash$290

Fifteen question

, These are the following information available for a cash generating unit as at 20 May 1998

Fair value less cost of disposal = $200 000

Value in use = $208 000

Carrying amount = $250 000

Recoverable amount = ???

Based on the information above, what are the recoverable amount and the amount of impairment loss (if any) for this cash generating unit?

A.Recoverable amount = $208 000 and Impairment loss = $42 000

B. Recoverable amount = $200 000 and Impairment loss = $50 000

C. Recoverable amount = $250 000 and Impairment loss = $NIL

D. Recoverable amount = $208 000 and Impairment loss = $50 000

Sixteen question

A first time revaluation gain of an asset will be classified as which of the following item in the Statement of profit or loss and other comprehensive income?

A. an item of expense in profit or loss

B. an item of loss in other comprehensive income

C an item of gain in other comprehensive income

D an item of income in profit or loss

Seventeen question

On 1 May 2000, Ham Ltd has an amount of unearned income of $80 000. Tax rate is 30%. What is Ham Ltd's exposure to a deferred tax consequence as of that date?

A. Deferred tax asset of $80 000

B Deferred tax liability of $24 000

C Deferred tax liability of $80 000

D Deferred tax asset of $24 000

Eighteen question

The following information relates to Siti Ltd for Tax Year of Assessment 2020:

Tax Loss = $15 200, Tax rate = 30%.

Which of the following is not the appropriate or correct accounting treatment?

A. No current tax liability is recognised for the financial year 2019

B. Disclosure as a note to the financial statements is required for the tax loss above as unutilised tax losses

C. Require the following adjusting entry as below, if the recognition criteria for a tax loss is satisfied:

Dr. Deferred tax asset$4 560

Cr. Income tax expense$4 560

C. Require the following adjusting entry:

Dr. Income tax expense$15 200

Cr. Current tax liability$15 200