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Accountant Test

For hiring finance and accounting manager or above level as a preliminary test before to decide whether to conduct interview.

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Max Super
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188 views

Accountant Test

For hiring finance and accounting manager or above level as a preliminary test before to decide whether to conduct interview.

Uploaded by

Max Super
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Accountant Test

The following trial balance relates to Quincy as at 30


September 2012:

The following notes are relevant:

(i)  On 1 October 2011, Quincy sold one of its products


for $10 million (included in revenue in the trial balance).
As part of the sale agreement, Quincy is committed to
the ongoing servicing of this product until 30
September 2014 (i.e. three years from the date of sale).
The value of this service has been included in the
selling price of $10 million. The estimated cost to
Quincy of the servicing is $600,000 per annum and
Quincy’s normal gross profit margin on this type of
servicing is 25%. Ignore discounting.
(ii)  Quincy issued a $25 million 6% loan note on 1
October 2011. Issue costs were $1 million and these
have been charged to administrative expenses. The
loan will be redeemed on 30 September 2014 at a
premium which gives an effective interest rate on the
loan of 8%.

(iii)  Quincy paid an equity dividend of 8 cents per share


during the year ended 30 September 2012.

(iv)  Non-current assets:


Quincy had been carrying land and buildings at
depreciated cost, but due to a recent rise in property
prices, it decided to revalue its property on 1 October
2011 to market value. An independent valuer confirmed
the value of the property at $60 million (land element
$12 million) as at that date and the directors accepted
this valuation. The property had a remaining life of 16
years at the date of its revaluation. Quincy will make a
transfer from the revaluation reserve to retained
earnings in respect of the realisation of the revaluation
reserve. Ignore deferred tax on the revaluation.
Plant and equipment is depreciated at 15% per annum
using the reducing balance method.
No depreciation has yet been charged on any non-
current asset for the year ended 30 September 2012.
All depreciation is charged to cost of sales.

(v)  The investments had a fair value of $15·7 million as


at 30 September 2012. There were no acquisitions or
disposals of these investments during the year ended
30 September 2012.
(vi)  The balance on current tax represents the under/
over provision of the tax liability for the year ended
30September 2011. A provision for income tax for the
year ended 30 September 2012 of $7·4 million is
required. At 30 September 2012, Quincy had taxable
temporary differences of $5 million, requiring a
provision for deferred tax. Any deferred tax adjustment
should be reported in the income statement. The
income tax rate of Quincy is 20%.

Required:
(a) Prepare the statement of comprehensive income
for Quincy for the year ended 30 September 2012.
(b) Prepare the statement of changes in equity for
Quincy for the year ended 30 September 2012.
(c) Prepare the statement of financial position for
Quincy as at 30 September 2012.
(d) Prepare the statement of cash flow for Quincy
for the year ended 30 September 2012.

Notes to the financial statements are not required.

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