你知道ACCA SBL考试报名费是多少？

4 Coral is the owner and managing director of Reef Ltd. She is considering the manner in which she will make her first

pension contributions. In November 2007 she inherited her mother’s house in the country of Kalania.

The following information has been extracted from client files and from telephone conversations with Coral.

Coral:

– 1972 – Born in the country of Kalania. Her father, who died in 2002, was domiciled in Kalania.

– 1999 – Moved to the UK and has lived and worked here since then.

– 2001 – Subscribed for 100% of the ordinary share capital of Reef Ltd.

– Intends to sell Reef Ltd and return to live in the country of Kalania in 2012.

– No income apart from that received from Reef Ltd.

Reef Ltd:

– A UK resident company with annual profits chargeable to corporation tax of approximately ￡70,000.

– Four employees including Coral.

– Provides scuba diving lessons to members of the public.

Payments from Reef Ltd to Coral in 2007/08:

– Director’s fees of ￡460 per month.

– Dividends paid of ￡14,250 in June 2007 and ￡14,250 in September 2007.

Pension contributions:

– Coral has not so far made any pension contributions in the tax year 2007/08 but wishes to make gross pension

contributions of ￡9,000.

– The contributions are to be made by Reef Ltd or Coral or a combination of the two in such a way as to minimise

the total after tax cost.

– Any contributions made by Coral will be funded by an additional dividend from Reef Ltd.

House in the country of Kalania:

– Beachfront property with potential rental income of ￡550 per month after deduction of allowable expenditure.

– Coral will use it for holidays for two months each year.

The tax system in the country of Kalania:

– No capital gains tax or inheritance tax.

– Income tax at 8% on income arising in the country of Kalania.

– No double tax treaty with the UK.

Required:

(a) With the objective of minimising the total after tax cost, advise Coral as to whether the gross pension

contributions of ￡9,000 should be made:

– wholly by Reef Ltd; or

– by Coral to the extent that they are tax allowable with the balance made by Reef Ltd.

Your answer should include supporting calculations where necessary. (9 marks)

12 Which of the following statements are correct?

(1) Contingent assets are included as assets in financial statements if it is probable that they will arise.

(2) Contingent liabilities must be provided for in financial statements if it is probable that they will arise.

(3) Details of all adjusting events after the balance sheet date must be given in notes to the financial statements.

(4) Material non-adjusting events are disclosed by note in the financial statements.

A 1 and 2

B 2 and 4

C 3 and 4

D 1 and 3

(c) In November 2006 Seymour announced the recall and discontinuation of a range of petcare products. The

product recall was prompted by the high level of customer returns due to claims of poor quality. For the year to

30 September 2006, the product range represented $8·9 million of consolidated revenue (2005 – $9·6 million)

and $1·3 million loss before tax (2005 – $0·4 million profit before tax). The results of the ‘petcare’ operations

are disclosed separately on the face of the income statement. (6 marks)

Required:

For each of the above issues:

(i) comment on the matters that you should consider; and

(ii) state the audit evidence that you should expect to find,

in undertaking your review of the audit working papers and financial statements of Seymour Co for the year ended

30 September 2006.

NOTE: The mark allocation is shown against each of the three issues.