Jacobs Ltd paid 480,000 on 1st April 2018 to acquire a reputed brand name and decided to amortise the cost using the sum of the years digits method estimating five-year useful life. How much would it write off as amortisation of a brand name in the year ended 31st December 2021?

72,000

120,000

64,000

128,000

As at 31st March 2020 a manufacturer reported at 284,000 machinery which originally cost 480,000. 90,000 had been paid for a new machine on 1st July 2020 and on 1st October a machine which cost 80,000 on 1st January 2017 was sold for 36,000. Annual depreciation is at 10% of cost using the straight-line method. What is the carrying value of machinery as at 31st March 2021 and the gain or loss on the disposal of machinery?

Carrying value: 490,000; Gain/Loss: 14,000 gain

Carrying value: 265,250; Gain/Loss: 18,000 loss

Carrying value: 273,250; Gain/Loss: 14,000 loss

Carrying value: 265,250; Gain/Loss: 18,000 gain

Rachel manufactures surgical gloves. Upon receiving an order from a hospital for supplying them with their requirements for three years ending on 31st December 2024, she raised an invoice for 15,000 and has accounted for it by crediting Sales account and debiting Receivables account. For preparing the financial statements in respect of the year ended 31st December 2022 the adjusting entries required are:

Debit Sales Account and credit Receivables account with 10,000

Debit Sales account and credit Deferred income account with 10,000

Debit Sales account and credit Cash account with 10,000

Debit Receivables account and credit Deferred Income account with 10,000

The Up To Heaven Co. provides service contracts to customers for maintenance of their elevator systems. On 1 October 2020 it agrees a four year contract with a major customer for 169,000. Costs over the period of the contract are reliably estimated at 56,333.

Under IAS 18 - 'Revenue', how much revenue should the company recognise in the income statement in the year ended 31 December 2020?

3,521

42,250

10,562

14,083

Jonathan and Shabila Trevelyan run a bus company with a 30 June accounting year end. On 1 March 2006 they signed a one year contract worth 72,000 to promote a local football team by repainting its buses each quarter to advertise different aspects of the team's activities. The buses were first painted on 1 May 2006 and the second repainting was made on 1 August 2006.

What revenue in relation to this contract should be recognised by Jonathan and Shabila for the year ended 30 June 2006?

24,000

12,000

18,000

72,000

Qalam Ltd has entered into a four year fixed price construction contract to build a factory. The total contract value is 60m and the estimated costs are 48m.

At the end of the first year, Qalam Ltd can estimate the outcome of the contract reliably. It has received cash payments for 26.7m and incurred costs for 18m.

The revenues related to this contract recognised in the first year are:

18m

8m

22.5m

12m

Jackson plc is planning to discontinue a major operation and incur as a result significant redundancy costs. At what point should Jackson recognize a provision for the expected redundancy costs?

The expected timetable is as follows:

5 July 2018-> Board approval of the provisional plans

10 September 2018-> Board approval of the detailed plans

30 November 2018-> Legal advisors appointed to draw up the necessary legal documents

15 December 2018-> Announcement of the termination plans to the employees who will be affected, including offer for voluntary redundancy

5 January 2019-> Final date for acceptance of voluntary redundancy offer

1 March 2019-> Final closure of the operations:

5 January 2019

30 November 2018

15 December 2018

1 March 2019

5 July 2018

Creamy Mist Ltd plc is planning to carry a major reorganisation of its operations. The reorganisation of operations would lead company to incur significant redundancy costs. At what point should Creamy Mist recognise a provision for the expected redundancy costs?

The expected timetable is as follows:

18 September 2019-> The reorganisation plan is first discussed in a board meeting

10 October 2019-> Board approves the plan for the reorganisation

30 October 2019-> Board's decision is communicated to employees and published in newspapers

10 November 2019-> The labour union agrees to the redundancy plan

30 November 2019-> Reorganisation is completed:

10 November 2019

10 October 2019

30 November 2019

30 October 2019