CIMA Management F2 Syllabus Exam Questions Answers

Page: 7 / 9

Question 28

The basic earning per share computed by a company for year ended 31st March 20X7 is £2 per share. The company had certain convertible debentures outstanding as on 31st March 20X7. The conversion of

debentures to equity shares would result in the earnings per share to be £2.2. Which of the following should the company disclose?

Options:

Basic earnings per share only

Diluted earnings per share only

Both basic and diluted earnings per share

Neither basic nor diluted earnings per share

Question 29

Which of the following statements about ST is true?

Options:

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

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

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

The ratio of distribution costs to revenue has increased significantly.

Question 30

Information from the financial statements of RST for the year ended 30 April 20X9 is as follows:

At 30 April 20X9 the ordinary shares are trading at $4.75.

What is the price earnings (P/E) ratio for RST at 30 April 20X9?

Options:

15.83

7.92

10.56

9.31

Question 31

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?

Options:

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.

Page: 7 / 9