Winter Special Limited Time 65% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: bigdisc65

Sure Pass Exam F1 PDF

Page: 4 / 18
Question 16

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 goodwill arising on the acquisition LM.

Give your answer to the nearest $.

Options:

Question 17

ABC uses an aggressive approach to managing its working capital. XYZ uses a conservative approach to managing its working capital.

Which of the following is ABC more at risk of compared to XYZ?

Options:

A.

Inventory obsolescence

B.

Running out of cash

C.

High finance costs

D.

Receivables not paying on time

Question 18

The International Accounting Standards Board's "The Conceptual Framework for Financial Reporting" (known as The Conceptual Framework) states that "faithful representation" is a fundamental qualitative characteristic.

In accordance with the Conceptual Framework which of the following is NOT part of faithful representation?

Options:

A.

Complete

B.

Neutral

C.

Free from error

D.

Comparable

Question 19

WX is considering an investment in ST.

At 31 December 20X2 ST had the following balances in its statement of financial position:

Which of the following would cause ST to become an associate investment of WX?

Options:

A.

WX purchases 15,000 of ST's $1 equity shares and 20,000 of ST's $1 preference shares.

B.

WX purchases 25,000 of ST's $1 equity shares.

C.

WX purchases 75,000 of ST's $1 equity shares.

D.

WX purchases 50,000 of ST's $1 preference shares.

Page: 4 / 18
Exam Code: F1
Exam Name: Financial Reporting
Last Update: Nov 21, 2024
Questions: 248
F1 pdf

F1 PDF

$69.65  $199
F1 Engine

F1 Testing Engine

$78.75  $225
F1 PDF + Engine

F1 PDF + Testing Engine

$87.15  $249