FINANCIAL REPORTING MOCK FOR JULY, 2024 EXAMINATIONS (PROFESSIONAL) LEVEL 2 Expert Verified
OLIVER TWIST PROFESSIONAL INSTITUTE
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THE INSTITUTE OF CHARTERED ACCOUNTANTS (GHANA)
MOCK FOR JULY, 2024 EXAMINATIONS
(PROFESSIONAL)
LEVEL 2
FINANCIAL REPORTING
(PAPER 2.1)
QUES...
Time Allowed
3 Hours Plus 15 Minutes for Reading & Planning
Reading Time
During the reading time, you may write notes on the examination paper but you should not commence
writing in your answer booklet provided.
Answer ALL Questions
22nd June, 2024
Lecturer/Examiner: (SIR EDEM) 0242051759
SIR EDEM (0242051759) Page 1 of 11
, QUESTION ONE
Hard Ltd, a public listed company, acquired the following investments:
On 1 April 2023, 24 million shares in Soft Ltd. This was by way of an immediate share exchange of
two shares in Hard Ltd for every three shares in Soft Ltd plus a cash payment of GH¢1 per Soft Ltd
share payable on 1 April 2026. The market price of Hard Ltd’s shares on 1 April 2023 was GH¢2
each.
On 1 October 2023, 6 million shares in Act Ltd paying an immediate GH¢2.50 in cash for each share.
Based on Hard Ltd’s cost of capital (taken as 10% per annum), GH¢1 receivable in three years’ time can
be taken to have a present value of GH¢0.75.
Hard Ltd has not yet recorded the acquisition of Soft Ltd but it has recorded the investment in Act Ltd.
Below are the Statements of Financial positions for all the three entities as at 31 March 2024.
Statement of Financial Position as at 31st March, 2024
Hard Ltd Soft Ltd Act Ltd.
GH¢’000 GH¢’000 GH¢’000
Non-current assets:
Property, plant and equipment 41,000 34,800 37,700
Investments 15,000 3,000 Nil
56,000 37,800 37,700
Current assets:
Inventories 9,900 4,800 7,900
Trade and other receivables 13,600 8,600 14,400
Cash and Bank 1,200 3,800 nil
24,700 17,200 22,300
Total assets 80,700 55,000 60,000
Current liabilities:
Trade and other payables 16,500 6,900 13,600
Bank overdraft nil nil 4,500
Taxation 9,600 3,400 1,900
Total liabilities 42,100 14,500 32,000
Total equity and liabilities 80,700 55,000 60,000
SIR EDEM (0242051759) Page 2 of 11
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