THE FOLLOWING INFORMATION RELATES TO QUESTIONS
on 1 July

question 27

Multiple Choice

THE FOLLOWING INFORMATION RELATES TO QUESTIONS
On 1 July 2013 Watson Pty Ltd granted 100 share appreciation rights (SARS) to each of its 50 employees, conditional on the employee not leaving the company in the next three years. The company estimates the fair value of the SARS at the end of each year in which a liability exists as shown in the table below. The intrinsic values of the SARS at the date of exercise at 30 June 2016, 2017 and 2018 are also shown. All SARS held by employees at 30 June 2016 vest.
$\begin{array}{|c|c|c|}\hline \text { Year ended } & \text { Fair value } & \text { Intrinsic value } \\\hline \text { 30 June 2014 } & \$ 14.40 & \\\hline \text { 30 June 2015 } & \$ 15.50 & \\\hline \text { 30 June 2016 } & \$ 18.20 & \$ 15.00 \\\hline \text { 30 June 2017 } & \$ 21.40 & \$ 20.00 \\\hline \text { 30 June 2018 } & & \$ 25.00 \\\hline\end{array}$
By 30 June 2016 nine employees have left and 15 employees have exercised their SARS.
-This is an example of:

• A) an equity-settled share-based payment transaction
• B) a cash-settled share-based payment transaction
• C) a share-based payment transaction where the counterparty has the settlement choice
• D) a share-based payment transaction where the entity has the settlement choice

Calculate cost of goods sold under different inventory costing methods (FIFO, LIFO, Average Cost).

Determine the effects of inventory errors on financial statements.

Compute inventory turnover and understand its implications on business operations.

Apply the concept of days in inventory to assess inventory management efficiency.

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Definitions:

Compiler Uses

Processes involving the translation of code written in a high-level programming language to a lower-level language, often machine code, so it can be executed by a computer.

Early Binding

The process of linking a function call to the actual code to be executed, done at compile time.

Abstract Class

A class that cannot be instantiated on its own and is designed to be a base class for other classes, often containing abstract methods.

Instance Instantiation

The process of creating a new object or instance of a class in programming, utilizing the class's constructor.