UG 003 College of Banking Advanced Black Stone PLC IFRS Corporate Reporting Questions (Code: A32 / date 21/5/2020)
Which subject: corporate advance reporting
If there is any program to use : Word file
Calculations or thury: Both
How many words:
1600
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TURNITIN REPORT
SIMILIRTY LESS THAN 5% College of Banking and Financial Studies
DEGREE: B.Sc. ACCOUNTING, AUDITING AND FINANCE
SEMESTER: FIVE
Student Name
Student Number
Semester
Spring 2020
MARKS
100
Weightage
50%
Unit title
ADVANCED CORPORATE REPORTING, UG003
Exam Paper Issue Date
14th May 2020
Type of Assessment
TAKE-HOME EXAMS
Submission Deadline
30th May 2020
Assessor:
Ms. Kumutha , Dr Roslin
Internal Verifier:
Dr. Labeeb
ADVANCED CORPORATE REPORTING – TAKE-HOME EXAMS – Spring 2020
Page 1
Instructions to candidates:
1. This assessment is Take home exam which is a substitute of your Final exam. It is to be
completed Individually.
2. This Assessment accounts for 50% of the total marks available for this Module.
3. Answer All the Questions.
4. You are expected to Show all your workings clearly wherever needed.
5. Please start each answer on Fresh page.
6. Plagiarism is a form of cheating in which students use the work of others and present it as
their own. Do not Allow another student to copy your work and then submit it under their
own name. The college considers this form of cheating as a serious offence.
7. Please limit your discussions around the theoretical question to around 1200 – 1300 words.
This assessment is mostly based on calculations, computations, and the correct application
of Financial accounting concepts. All your calculations should be shown in full into the
main body of your answer.
8. Please be aware that your work will be submitted through Turnitin. You must only submit
your own work including correct citations and references for any external materials used
in your work.
Turnitin ID : 24873025
Password: ACR-EX-SPR20
ADVANCED CORPORATE REPORTING – TAKE-HOME EXAMS – Spring 2020
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There are TWO Sections
Section A – TWO (compulsory) questions to be attempted
60 marks weightage
Section B- One question (compulsory)
40 marks weightage
Section A – Two compulsory questions
(2 questions* 30 = 60 Marks).
Question 01
Black Stone PLC is a multinational company based in North America. The company
manufactures and sells high-end photocopying machines. The management of the company have
identified operating segments based on geographical location. Information for these segments is
provided below.
Segment
Total
revenue
External
revenue
Internal
revenue
$
$
$
1,086,000
504,000
582,000
352,800
12,240,000
East Asia
130,800
118,800
12,000
-93,000
1,242,000
South Asia
540,000
540,000
0
169,200
3,630,000
North America
1,188,000
702,000
486,000
435,600
13,650,000
South America
306,000
144,000
162,000
-54,000
2,088,000
Europe
349,200
194,400
154,800
44,400
3,150,000
3,600,000
2,203,200
1,396,800
855,000
36,000,000
Middle East
TOTAL
Profit/loss
Asset
$
$
You are required to:
A. Evaluate which segments must be reported according to IFRS 8? Show workings clearly.
(20 Marks)
ADVANCED CORPORATE REPORTING – TAKE-HOME EXAMS – Spring 2020
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B. You are the financial controller of Black Stone PLC, a listed company which prepares
consolidated financial statements in accordance with International Financial Reporting
Standards (IFRS). Your managing director, who is not having a background in
accounting, has requested you to clarify his questions (given below in points i & ii)
concerning segment reporting, with relevant examples:
i.
ii.
In which circumstance the company can able to declare a segment as reportable segment
even if they do not meet the quantitative thresholds?
Explain the disclosure requirement on reportable operating segments.
Required:
Write a report to the managing director by explaining the IFRS 08 – Operating Segments
to answer his questions.
(10 marks)
(Q1-Total 30 Marks)
ADVANCED CORPORATE REPORTING – TAKE-HOME EXAMS – Spring 2020
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Question 02
Zen Sports Club’s trial balance as at 31st March 2019 is given below. The club operates its own
restaurant to generate additional income for running the club.
Zen Sports Club’s Trial Balance as at 31st March 2019
Dr
Cr
$
$
Sports Equipment
775,000
Club Premises
2,674,000
Subscription received
327,892
Sale of event tickets
64,000
Salaries of restaurant staff
437,500
Furniture and fittings
483,400
Rates and insurance
181,900
General expenses
46,450
Event expenses
28,000
st
Accumulated fund 1 April 2018
3,764,440
Donation received
42,400
Telephone and postage
50,320
Bank
28,360
Restaurant purchases
871,480
Creditors for restaurant supplies
153,600
Restaurant sales
1,524,250
st
Restaurant stock as at 1 April 2018
300,172
Total
5,876,582
5,876,582
The following additional information is also available:
i.
Restaurant stocks as at 31st March 2019 $116,290
ii.
Provide for depreciation: Sports equipment $ 66,500; Furniture and fittings $ 49,175.
Requirement:
A. Prepare the Income statement for the year ended 31st March 2019 for Zen Sports Club –
Restaurant.
(10 Marks)
B. Prepare the Income and Expenditure Account for the year ended 31st March 2019 for Zen
Sports Club.
(10 Marks)
C. Prepare the Statement of Financial Position as at 31st March 2019 for Zen Sports Club.
(10 Marks)
(Q2-Total 30 Marks)
ADVANCED CORPORATE REPORTING – TAKE-HOME EXAMS – Spring 2020
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Section B – One compulsory question
(1 Question* 40 = 40 Marks).
Question 03
ABC plc existing financial instruments are given below:
A. ABC plc issues 100,000 $1 ordinary shares for cash consideration of $2 each. Issue costs are
$10,000.
You are Required to:
Illustrate how the issue of shares is accounted in the financial statements of ABC plc.
(5 Marks)
B. ABC plc issues 5% convertible bonds at their nominal value of $ 5 million. The bonds are
convertible at any time up to maturity into 1500 ordinary shares. Alternatively, the bonds
will be redeemed at par after 3 years. Similar non-convertible bonds would carry an interest
rate of 7%.
The present value of $1 payable at the end of year, based on rates of 5% and 7% are as follows:
End of year
1
2
3
5%
0.952
0.907
0.864
7%
0.935
0.873
0.816
Requirement:
i. What amounts will be shown as a financial liability and as equity when the convertible
bonds are issued?
(10 Marks)
ii. What amounts will be shown in the income statement and Statement of Financial
Position for years 1& 2?
(10 Marks)
ADVANCED CORPORATE REPORTING – TAKE-HOME EXAMS – Spring 2020
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C. You are the financial controller of ABC plc which prepares consolidated financial
statements in accordance with International Financial Reporting Standards (IFRS). Your
managing director, who is not from finance area, has some questions related to financial
reporting on small and medium enterprise (given below):
i. Why do small and medium entities, need not comply with the detailed requirements of
IFRS?
ii. Is it true that there are different accounting rules which are available for small and medium
sized entities?
iii. Can ABC plc take advantage of them? Explain.
Required:
Provide answers to the questions raised by the managing director by evaluating the key
points of IFRS for small and medium sized entities (SMEs).
(15 Marks)
(Q3-Total 40 Marks)
……………………………………END OF EXAM PAPER…………………………………
ADVANCED CORPORATE REPORTING – TAKE-HOME EXAMS – Spring 2020
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