Home For AAT student members AQ 2016 Professional Diploma in Accounting Financial Statements for Limited Companies
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Practice for exam questions

Hello, got a couple of queries on FS that i cannot find the answer:

1) underestimated tax liability for the year prior is19k, current year charge is 232k. would this mean that the payable tax for current year is actually 251k, right? what amounts go into SFP & SPL?
2)looking for examples where a PPE has been impaired, my practice document has carrying amount 200k and recoverable amount 50k (cost 4255k and acc depreciation 652k) whats the PPE amount?
3)Bad debt written off. this would be a credit to trade receivables? how do i account for it?
4)has anyone come across a practice item similar to this: land & building with 200k carrying amount and 28k recoverable amount, land original cost of 12k. land revaluates with reduce balance 20% and builing using straight line for 20 years of usefull life. how do you resolve this? Im pretty sure Im missing details. any ideas?



  • Pian32Pian32 Registered Posts: 189
    1) The full 251k goes into SPL as its counted as an expense on this year. If the underestimated amount wasn't paid then you also have 251k in the SFP but if it was then it's only 232k as that's the outstanding amount.

    2) You have an impairment loss of 150k. I'd want to see the full question though as those figures don't feel like they match.

    3) DEBIT Bad debt expense CREDIT Trade Receivables and if necessary DEBIT VAT account

    4) Again this looks paraphrased but the impairment would reduce the carrying amount to the recoverable amount. It feels like theres more to the question than stated however as the depreciation methods mean nothing with the figures given.
    AAT Level 4, MAAT
    ACCA in progress
    F4- Passed Aug 2020
    F6- Sitting September 2020
  • dnataliadnatalia Registered Posts: 4
    thanks, PIAN32. this is what i manage to remember that i was unsure how to resolve after sitting for my FS exam, so i dont really have the full question.
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