CIMA CIMAPRA19-F02-1 Exam Questions Instant Access

Question 1

What is the total comprehensive incomeattributable tothe non-controlling interestthat will be presented in GHI's consolidated statement of changes in equity for the year ended 31 December 20X4?

A$95,000

B$595,000

C$575,000

D$190,000

Answer : A

Question 2

ST granted 1,000 share appreciation rights (SARs) to its 100 employees on 1 December 20X7. To be eligible, employees must remain employed for 3 years from the grant date.In the year to 30 November 20X8, 10 staff left and a further 20 were expected to leave over the following two years. The fair value of each SAR was $12 at 1 December 20X7 and $15 at 30 November 20X8.

What is the accounting entry to record this transaction for the year to 30 November 20X8?

ADr Staff costs $350,000,Cr Non-current liabilities $350,000

BDr Staff costs $350,000,Cr Equity $350,000

CDr Staff costs $280,000, Cr Non-current liabilities $280,000

DDr Staff costs $280,000, Cr Equity $280,000

Answer : A

Question 3

LM and JK operatein the same countryand prepare their financial statements to30 June 20X6 in accordance with International Accounting Standards. On 27 June 20X6 both entities raised $1 million cashby issuing debt instruments with identical terms and conditions. Prior to this issue both entities were financed entirely by equity.

At 30 June 20X6 the gearing ratios,calculatedasDebt/Equity x 100%, wereas follows:

LM: 30%

JK: 65%

Which of the following independent options would explain the difference between LM and JK's year-end gearing?

ALM revalued its land and buildings upwards in the year; JK has performed no revaluations.

BLMmade a bonus issue from retained earnings in the year; JK issued no shares in the year.

CLM had 100,000 $1 shares at the year end; JKhad 200,000 50c shares in issue at the year end.

DLM held no investments in other entities; JK revalued its available for sale investments upwards in the year.

Answer : A

Question 4

Which of the following statements about ST is true?

AThe return on the investment in associate on an annual basis is 14%.

BThe effective tax rate incurred by ST has remained largely the same.

CThe increase in administrative expenses is in line with the increase in revenues.

DThe ratio of distribution costs to revenue hasincreased significantly.

Answer : B

Question 5

UV has raised $100,000 through theissue of two irredeemable financial instruments:

* 6% debentures with a current market value of $101.50 per $100 nominal value; and

* 8% preference shares with a current share price of $2.20 each.

The corporateincometax rate is 20%

What is the post tax cost of debt foreach of theseinstruments?

AOption A

BOption B

COption C

Answer : A

Question 6

AB, a listed entity, prepared its financial statements to 31 December 20X7, in accordance with international accounting standards.

Which THREE of the following were disclosed as related parties of AB in its financial statements?

AAB's defined benefit pension plan.

BThe wife of the Managing Director of AB, to whom AB sold a motor vehicle in the year to 31 December 20X7.

CST, an entity that was jointly established by AB and CD, and that is accounted for as a joint venture in AB's financial statements to 31 December 20X7.

DAB's bank that provides more than 60% of the entity's loan finance.

EAB's main supplier, GH, who supplies more than 70% of AB's goods for manufacture.

Answer : A, B, C

Question 7

Which THREE of the followingwould typically indicate a finance lease?

AAn asset with a useful life of ten years is being leased for ten years.

BThe lessor is responsible for the annual maintenance of the asset.

CThe lessee has the option to buy the asset at the end of the lease for $1.

DThe lease contract for an asset includes an upgrade to the asset every two years.

EA leased asset has been specifically modified for the lessee's use.

Answer : A, C, E

CIMA F2 Advanced Financial Reporting CIMAPRA19-F02-1 Exam Questions