F2 CIMA F2 Advanced Financial Reporting exact Exam Questions

F2 Advanced Financial Reporting

Last Update 2 hours ago Total Questions : 268

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Question # 51

On 1 January 20X7 GH purchased plant and equipment at a cost of $400,000. The temporary differences in respect of this plant and equipment at 31 December 20X7 and 20X8 have been calculated as follows:

Assume that there are no other temporary differences in the periods and that the corporate income tax rate is 25%. GH is expected to have significant taxable profits in the future.

Which of the following is the correct impact in GH ' s statement of financial position at 31 December 20X8 in respect of deferred tax?

Increase in the deferred tax asset.

Increase in the deferred tax liability.

Decrease in the deferred tax asset.

Decrease in the deferred tax liability.

Question # 52

ST acquired 80% of the equity shares of AB on 1 January 20X7. AB acquired 60% of the equity shares of UV on 1 January 20X8. Profit for the year ended 31 December 20X9 for AB is $160,000 and for UV is $100,000.

Calculate the non-controlling interest figure to be included within ST ' s consolidated statement of profit or loss for the year ended 31 December 20X9.

Give your answer to the nearest whole number in $000s.

$ ?

Question # 53

The capital structure of ST is summarised in the table below:

What is the weighted average cost of capital of ST?

Give your answer as a percentage to one decimal place.

? %

Question # 54

CD granted 1,000 share options to its 100 employees on 1 January 20X8.To be eligible, employees must remain employed for 3 years from the grant date. In the year to 31 December 20X8, 15 staff left and a further 25 were expected to leave over the following two years.

The fair value of each option at 1 January 20X8 was $10 and at 31 December 20X8 was $15.

Which THREE of the following are true in respect of recording these share options in the year ended 31 December 20X8?

The credit entry will be to equity.

The credit entry will be to non-current liabilities.

Fair value at 1 January 20X8 will be used to value the options.

Fair value at 31 December 20X8 will be used to value the options.

The calculation of the charge for the year will be adjusted for actual leavers only.

The calculation of the charge for the year will be adjusted for actual and estimated leavers.

Question # 55

Taking each statement individually, which of the following explains the movement in the gross profit margin from 20X4 to 20X5 as calculated by the analysts?

Increase in the levels of closing inventory of raw materials.

Reduction in the cost of raw materials NOT passed onto customers.

Prompt payment discounts no longer offered to customers.

Increase in the volume of sales over the year.

Question # 56

Which of the following is NOT an example of an unconsolidated structured entity as defined in IFRS12 Disclosure of Interests in Other Entities?

A post-employment benefit plan

A securitisation vehicle

An asset-backed financing scheme

An investment fund

Question # 57

Following the impairment review of the investment in BC, what would be the carrying value of this associate in KL ' s consolidated statement of financial position at 31 December 20X9?

$1,050,000

$1,240,000

$1,800,000

$1,960,000

Question # 58

ST has in issue unquoted 7% debentures which were issued at par and are redeemable in 1 year ' s time. These debentures cannot be traded. The yield to maturity on these debentures has been calculated at 5%.

Which of the following would explain why the yield to maturity is lower than the coupon?

ST will benefit from the tax relief on the interest payment.

The debentures will be redeemed at a discount to their par value.

The debentures will be redeemed at their par value.

The market value of the debentures must be higher than their par value.

Question # 59

AB sold the majority of its operating equipment to LM for cash on 30 December 20X9 and then immediately leased it back under an operating lease.

AB used the cash proceeds from the sale to reduce its long term borrowings significantly. No early repayment charge was levied by the lender.

Which of the following statements is true in respect of AB ' s ratios calculated at 31 December 20X9?

AB ' s return on capital employed would be lower as a result of this sale being recorded.

AB ' s current ratio would be lower as a result of this sale being recorded.

AB ' s non-current asset turnover would be lower as a result of this sale being recorded.

AB ' s gearing ratio would be lower as a result of this sale being recorded.

Question # 60

Which TWO of the following are TRUE in respect of preparing a consolidated statement of cash flows where there has been an acquisition of a subsidiary part way through the year?

Investing activities will include a total cash outflow for the acquisition comprising the cash paid for the subsidiary less the cash held by the subsidiary at the acquisition date.

The working capital held by the subsidiary at acquisition will be excluded from the year end figures based on the percentage shareholding in the subsidiary.

Non-controlling interest will arise in relation to the subsidiary and any dividends paid to the non-controlling interest will be shown within financing activities as a cash outflow.

Any shares that were issued on acquisition of the subsidiary will be shown separately on the statement of cash flows within financing activities.

The year end cash and cash equivalents balance will be reduced by the cash and cash equivalents that were held by the subsidiary at the acquisition date.

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