Acid
01-05-08, 11:49 AM
F7 ERRATA SHEET - 1 May 2008
Page A2.16 - Example
Read the narration of first journal entry as ‘being reversal of goods not actually received or included in inventory’
Page A2.17 – Answer to Test Yourself 3
In the extracts from income statement and extracts from the balance sheets read the statement as (showing 60000 & 40000). Note that it is only presentation error. The original and revised profit is correct.
Page A3.18 – Synopsis
The synopsis named as ‘Sales of goods’ should be with following branches:
1. transferred significant risks and rewards of ownership of goods
2. the entity does not retain effective control over the goods sold
3. amount of revenue can be measured reliably
4. probable that economic benefits associated with transaction will flow to entity
5. costs incurred for transaction and costs to complete transaction can be measured reliably
Page A3.25 – Synopsis
Synopsis named as ‘Asset’ should be with following branch:
present discounted value of future net cash inflows that are expected to generate in the normal course of business.
Study Guide A5 - Header
Read the header as ‘Alternative Models and Practices’
Page A5.24 – Answer to Self Examination Question 2
Name of the company in example explained is Happy co.
Page D3.16
Read point no. 4 in ‘additional information’, reserves of Rose Co. instead of reserves of Stake Co
Page D3.48 - Journal entry for impairment of goodwill
The first journal entry given under the heading profit on goodwill impairment is not necessary.
Read second entry for loss on goodwill impairment as:
Dr-----Impairment (Group reserves)-----x
-------Cr----Goodwill-----------------------x
Page E2.24 - Profit retention ratio
Read the rule of thumb for analysis purposes as:
The higher the ratio, the more shareholders expect the organisation to retain for further growth. This means that the higher the ratio, the higher the expected growth.
Page A2.16 - Example
Read the narration of first journal entry as ‘being reversal of goods not actually received or included in inventory’
Page A2.17 – Answer to Test Yourself 3
In the extracts from income statement and extracts from the balance sheets read the statement as (showing 60000 & 40000). Note that it is only presentation error. The original and revised profit is correct.
Page A3.18 – Synopsis
The synopsis named as ‘Sales of goods’ should be with following branches:
1. transferred significant risks and rewards of ownership of goods
2. the entity does not retain effective control over the goods sold
3. amount of revenue can be measured reliably
4. probable that economic benefits associated with transaction will flow to entity
5. costs incurred for transaction and costs to complete transaction can be measured reliably
Page A3.25 – Synopsis
Synopsis named as ‘Asset’ should be with following branch:
present discounted value of future net cash inflows that are expected to generate in the normal course of business.
Study Guide A5 - Header
Read the header as ‘Alternative Models and Practices’
Page A5.24 – Answer to Self Examination Question 2
Name of the company in example explained is Happy co.
Page D3.16
Read point no. 4 in ‘additional information’, reserves of Rose Co. instead of reserves of Stake Co
Page D3.48 - Journal entry for impairment of goodwill
The first journal entry given under the heading profit on goodwill impairment is not necessary.
Read second entry for loss on goodwill impairment as:
Dr-----Impairment (Group reserves)-----x
-------Cr----Goodwill-----------------------x
Page E2.24 - Profit retention ratio
Read the rule of thumb for analysis purposes as:
The higher the ratio, the more shareholders expect the organisation to retain for further growth. This means that the higher the ratio, the higher the expected growth.