F1 Exam Dumps - Financial Reporting

AAA has the following working capital ratios at 30 March 20X4:

During the year ended 30 March 20X4 credit purchases were $3,600 and at 30 March 20X4 the outstanding trade payables amounted to $522.

The year ended 30 March 20X4 was not a leap year.

Calculate the working capital cycle for AAA.

Give your answer to one decimal place.

When developing local Generally Accepted Accounting Principles (known as local GAAP) some countries start with International Financial Reporting Standards (IFRSs) which are then amended to reflect local needs and conditions.

This type of approach is classified as:

QR purchased a property for its investment potential on 1 January 20X3 for $2.5 million.

The total property cost is split as follows: land $1 million and buildings $1.5 million. The buildings were expected to have a remaining useful life of 40 years.

The local property index at 31 December 20X3 indicates that the fair value of the property has risen by 10%.

What is the balance that QR will include in its statement of financial position at 31 December 20X3 for this property, assuming that it uses the IAS 40 Investment Properties fair value model?

Give your answer in $million to two decimal places.

Why are excise duties an attractive method of raising tax for governments?

Select TWO that apply.

Which of the following is not a possible tax rate structure?

The International Accounting Standards Board's "The Conceptual Framework for Financial Reporting" identifies fundamental and enhancing qualitative characteristics of financial statements.

Which of the following is included within the fundamental characteristics?

Which of the following are techniques that can be used by a company to ensure they receive timely payment of receivables? Select ALL that apply:

On 31 March 20X1 OP decided to sell a property. On that date this property was correctly classified as held for sale in accordance with IFRS 5 Non-Current Assets Held For Sale And Discontinued Operations.

In the draft financial statements of OP for the year ended 31 October 20X1 this property has been included at its fair value, which was $520,000 lower than its carrying value. This has resulted in a charge to profit or loss, the result of which is that the draft financial statements show a loss of $450,000 for the year to 31 October 20X1. When the management board of OP reviewed the draft financial statements it was unhappy about the loss and decided that the property should be reclassified as a non-current asset and reinstated to its original value, despite the fact that its plans for the property had not changed.

In accordance with the ethical principle of professional competence and due care, which THREE of the following statements explain how this property should be accounted for in the financial statements of OP for the year ended 31 October 20X1?

Which of the following would NOT be classified as part of non-current assets in a statement of financial position?

Which of the following is the main purpose of corporate governance regulation?

In accordance with IAS 16 Property, Plant and Equipment, in which of the following situations would subsequent expenditure on a non-current asset be capitalised?

A specialized product was commissioned by a customer and the agreed price was $38,000. The product was completed at a cost of $34,000.

It was then discovered that new regulations meant that the specialized product now failed health and safety requirements. The specialized product had to be modified to meet the new regulations at a cost of $9,000. The customer agreed to pay an extra $3,000 towards the modifications.

At 31 December 20X5 the specialized product was still in inventory and had not been modified.

Calculate the value of the specialized product that should be included in inventory as at 31 December 20X5.

Give your answer to the nearest whole $000.

KL has just completed their inventory count and has ascertained that the cost value of the inventory is $460,000; this was made up of 10,000 units of component part FF.

A week before the year end the FF components were moved to a temporary warehouse.

Two weeks later they were inspected and found to have been damaged by the damp conditions in the temporary warehouse.

Of the 10,000 units 2,500 of them were damaged. After remedial work of $5.00 per unit KL anticipates they will be able to sell the damaged parts for $32.00 per unit.

What is the value for closing inventory to be included in the financial statements of KL?

Give your answer to the nearest $.

An entity has a working capital cycle of 120 days which has been calculated in part from the following data:

What is the stock holding period on the basis of 365 days in a year?

Give your answer to the nearest whole day.

Company RET's financing activities are exactly 35% of their operating activities expenses each month. Below is a list of Company RET's total expenses for this month:

Inventory supplies purchased: £145,000

Employee wages: £65,000

Purchase of a shop: £105,000

Dividend payments: ??

Cash repayments on loan: £61,000

What is company RET's total dividends payment for this month?

XY acquired 75% of the equity shares of CD on 1 January 20X2 for $230,000.

On 1 January 20X2 CD had the following balances:

XY uses the proportionate share of net assets method to value non controlling interest at acquisition.

Calculate the goodwill arising on the acquisition of CD.

Give your answer to nearest whole number.

An entity's inventory days are 45 days.

An entity ceased to manufacture a product in 20X4. Raw materials used solely in the manufacture of that product are still held in inventory at 31 December 20X4.

Place the appropriate response below to show how inventory days will be affected if this raw material inventory is written off as obsolete.

AA manufactures computers. These are sold to BB at $100 a computer plus a 5% sales tax. BB subsequently sells the computers to CC for $200 a computer plus a 5% sales tax. C sells the computers to customers at $300 a computer plus a 5% sales tax.

The total tax received by the tax authority is $30.

Which type of tax is described above?

Statements of financial position for YZ, BC and DE at 31 March 20X2 include the following balances:

YZ purchased 90% of BC's equity shares for $508,000 on 1 January 20X2. On 1 January 20X2 BC's retained earnings were $183,000. YZ uses the proportion of net assets method to value non-controlling interest at acquisition.

YZ purchased 30% of DE's equity shares on 1 April 20X1 for $112,000. DE's retained earnings at 1 April 20X1 were $88,000.

On 1 February 20X2 YZ sold goods to BC for $28,000 at a mark up of 25% on cost. All the goods were still in BC's inventory at 31 March 20X2.

Calculate the value of inventory that will be included in YZ's consolidated statement of financial position at 31 March 20X2.

Give your answer to the nearest whole $.

Which of the following is NOT an appropriate description of the meaning of the term incidence of tax?

XY purchased a building on 1 April 20X1 for $300,000 with a useful economic life of 30 years. On 1 April 20X7 the building was revalued at $525,000.

What will the new depreciation charge be following the revaluation?

Give your answer as a whole number.

Identify whether the scenarios below are examples of tax evasion or tax avoidance, by placing either tax evasion of tax avoidance against each one.

RST operates in Country X where the tax rules state entertaining costs and accounting depreciation are disallowable for tax purposes.

In year ending 31 May 20X4, XYZ made an accounting profit of $480,000.

Profit included $16,300 of entertaining costs and $15,150 of income exempt from taxation.

XYZ has plant and machinery with accounting depreciation amounting to $24,200 and tax depreciation amounting to $45,200.

Calculate the tax charge for the year ended 31 May 20X4 assuming all profits are taxed at 25%.

Statements of financial position as at 31 December 20X8 for JK, LM and PQ are as follows:

[1] JK purchased 80% of LM's $1 equity shares on 1 January 20X8 for $260,000 when the retained earnings of JK were $110,000. At that date the non-controlling interest had a fair value of $63,000.

[2] JK purchased 25% of PQ's $1 equity shares on 1 January 20X8 for $90,000 when the retained earnings of PQ were $96,000.

[3] During the year JK sold goods to LM for $32,000 at a mark up of 33.33% on cost. Half of the goods were still in LM's inventory at 31 December 20X8.

[4] LM transferred $32,000 to JK on 30 December 20X8 in settlement of the inter-group trade. JK did not record the cash in its financial records until 2 January 20X9.

Calculate the value of inventory that would be included in JK's consolidated statement of financial position at 31 December 20X8.

Give your answer to the nearest $.

DEF is considering introducing a Pay-As-You-Earn (PAYE) system but unsure of the advantages of using it.

Which of the following statements are advantages from the employees perspective of an entity using a PAYE system for collecting taxes from employees.

Select ALL that apply.

An entity purchased equipment on 1 April 20X4 for $200,000. The equipment was depreciated using the reducing balance method at 20% a year.

Depreciation was charged up to and including 31 March 20X7. At that date the recoverable amount of the equipment was $94,000.

Calculate the impairment loss on the equipment in accordance with IAS 36 Impairment of Assets.

Give your answer to the nearest whole $.