KL issued $100,000 of 6% convertible debentures at par on 1 January 20X7. These debentures are redeemable at par or can be converted into 5 shares for each $100 of nominal value of debentures on 31 December 20X9.
The share price on 1 January 20X7 is $18 a share. The share price is expected to grow at a rate of 7% a year.
The expected redemption value for each $100 nominal value of debentures on the date of conversion is:
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?
An entity undertakes an issue of new debt which has the effect of reducing the entity's weighted average cost of capital (WACC).
Which of the following would best explain why the WACC will have fallen?
XY puchased 2% of the equity shares of FG on 1 October 20X3.
XY paid $25,000 for the shares as well as a transaction cost of 2.5% of the purchase price.
The shares are being held for short term trading and XY intend to sell them in December 20X3.
At the year end of 31 October 20X3, the shares in FG could be sold for $28,000.
What is the journal entry to record the subsequent measurement for this investment at 31 October 20X3?
If you were asked to express the overall performance of an entity as a percentage of its total investment in net assets which of the following ratios would you calculate?
Which of the following is a related party according to the definition of a related party in IAS24 Related Party Disclosures?
GG's gearing is currently 50% compared to the industry average of 40% (both measured as debt/equity). GG's debt is all in the form of a single bank loan that is repayable in five years' time. The directors of GG are seeking to raise finance for a new project and they are considering an additional bank loan from the same bank.
Which of the following would prevent the bank from lending the finance for the project in the form of a new bank loan?
AB has taxable temporary differences arising from the revaluation of non current assets.
What is the journal entry to record the movement in the provision for deferred tax resulting from this difference?
AB and CD are separate entities that prepare financial statements to 31 May using international accounting standards. AB and CD provide technical support services to the financial services industry and operate in the same country. The financial statements are identical except for the following:
• AB purchased all operating equipment, paying $100,000, using a 5 year bank loan. The useful life of the equipment was 5 years.
• CD signed an operating lease agreement for all operating equipment for 5 years paying $20,000 per year.
Both entities charge all expenses relating to the equipment to cost of sales.
From the information provided, which of the following ratios would be reliably comparable for AB and CD?
Information from the financial statements of an entity for the year to 31 December 20X5:
The gearing ratio calculated as debt/equity and interest cover are:
TESTED 05 Feb 2025
