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NEW QUESTION 60
At 31 October 20X1 RS has in issue 10% debentures 20X8 with a carrying value of $350,000.
Extracts from its statement of profit or loss for the year ending 31 October 20X7 are as follows:
What is the interest cover for RS for the ended 31 October 20X7?
- A. 10.0 times
- B. 9.0 times
- C. 8.0 times
- D. 11.1 times
Answer: B
NEW QUESTION 61
When preparing a consolidated statement of cash flows, which of the following describes the correct presentation of an associate's dividends?
- A. Dividends paid by the associate in cash flows from financing activities
- B. Dividends paid by the associate in cash flows from investing activities
- C. Dividends received from the associate in cash flows from investing activities
- D. Dividends received from the associate in cash flows from operating activities
Answer: C
NEW QUESTION 62
EF has redeemable 10% bonds which are currently trading at $94.00 for each $100 of nominal value. The bonds can be redeemed at par in five years' time. The corporate income tax rate is 22%.
The present value of the cash flows associated with $100 nominal value of these bonds at a discount rate of 7% is $9.28.
Calculate the post tax cost of debt.
Give your answer as a percentage to one decimal place.
%
Answer:
Explanation:
9.4, 9.3, 9.39, 9.40
NEW QUESTION 63
On 1 January 20X4 JK had 1,500,000 ordinary shares in issue. On 1 September 20X4 JK issued 600,000 ordinary shares at the market value of $2.50 a share. For the financial year ended 31 December 20X4 the statement of profit or loss shows profit before tax of $625,000 and profit after tax of $500,000.
What is the earnings per share for the year ended 31 December 20X4?
- A. 36.8 cents
- B. 29.4 cents
- C. 26.3 cents
- D. 23.8 cents
Answer: B
NEW QUESTION 64
MN had the following profit figures for the year ended 30 November 20X6:
MN's statement of financial position at 30 November 20X6 included the following:
Calculate return on capital employed for MN for the year ended 30 November 20X6.
Give your answer to one decimal place.
? %
Answer:
Explanation:
15.9, 15.91, 15.90, 16, 16.0
NEW QUESTION 65
W and Y are very similar entities with the same level of profit before interest and tax. However, W has gearing of 95% and Y has gearing of 30%.
Which of the following statements is true?
- A. Investing in W carries a higher level of risk than investing in Y.
- B. Investors in Y will expect a higher return than investors in W.
- C. A greater proportion of profit will be available out of which to declare a dividend in W.
- D. Y has a greater commitment to meet interest payments than W.
Answer: A
NEW QUESTION 66
A group presents its financial statements in A$.
The goodwill of its only foreign subsidiary was measured at B$100,000 at acquisition. There have been no impairments to this goodwill.
Exchange rates (where A$/B$ is the number of B$'s to each A$) are as follows:
The value of goodwill to be included in the group's statement of financial position in respect of its foreign subsidiary for the year ended 31 December 20X4 is:
- A. A$75,758.
- B. A$66,667.
- C. A$132,000.
- D. A$150,000.
Answer: A
NEW QUESTION 67
CD acquired 100% of the equity share capital of FG for cash consideration of Kr1,200,000 on 1 January
20X7.
Retained earnings of FG at the date of acquisition was Kr800,000. CD operates from Country A and its functional and presentation currency is $. FG is located and trades throughout Country B and its functional currency is the Krona (Kr).
CD has no other subsidiaries. Goodwill had not suffered any impairment to date.
Summarised data from the statements of financial position for both entities at 31 December 20X7 is presented below:
Calculate the exchange difference arising on the retranslation of goodwill on the acquisition in the consolidated statement of financial position of CD at 31 December 20X7.
Give your answer to the nearest $000.
Answer:
Explanation:
14, 14000, 13636, 13637
NEW QUESTION 68
Which of the following is a related party according to the definition of a related party in IAS24 Related Party Disclosures?
- A. Provider of finance
- B. Major supplier
- C. Managing Director
- D. Major customer
Answer: C
NEW QUESTION 69
UV entered into a five year non-cancellable operating lease for an asset two years ago. Lease payments are settled annually in arrears.
At the year end, UV no longer requires this leased asset as they have decided to discontinue the product line that it was used for.
At this date UV had made two out of the five lease payments.
Which of the following statements about the unavoidable lease payments is true in accordance with IAS
37 Provisions, Contingent Liabilities and Assets?
- A. A provision should be recognised for the unavoidable lease payments with a corresponding charge to other comprehensive income.
- B. A provision should be recognised for the unavoidable lease payments with a corresponding charge to profit or loss.
- C. The amount of the unavoidable lease payments should be ignored in the financial statements.
- D. The amount of the unavoidable lease payments should be disclosed in the financial statements with no corresponding accounting entry.
Answer: B
NEW QUESTION 70
GH's financial statements show the following:
What is the value of the dividend received from the associate to be included in GH's consolidated statement of cash flows for the year?
Give your answer to the nearest $000.
$ ? 000
Answer:
Explanation:
300, 300000
NEW QUESTION 71
XY has a weighted average cost of capital (WACC) of 12%. The debt:equity ratio is 1:3 and this is considered low for the industry. XY needs to raise finance to purchase new machinery in the coming year.
Which of the following forms of finance is most likely to increase the WACC?
- A. Finance lease
- B. 8% preference shares
- C. Rights issue of equity shares
- D. 6% bank loan
Answer: C
NEW QUESTION 72
Operating segments are separately reportable where they exceed 15% of revenue / profits / assets.
These must in total cover 80% of total revenue. Is this statement true or false?
- A. False
- B. True
Answer: A
NEW QUESTION 73
AAA is the only director of entity CD. AAA is also a director of entity GH. CD owns 30% of the equity of MN and 60% of the equity of OP.
Identify which of the following are related parties of CD by placing the appropriate response against one.
Answer:
Explanation:
NEW QUESTION 74
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:
- A. $100.00
- B. $90.00
- C. $103.04
- D. $110.25
Answer: D
NEW QUESTION 75
AB, a listed entity, prepared its financial statements to 31 December 20X7, in accordance with international accounting standards.
Which THREE of the following were disclosed as related parties of AB in its financial statements?
- A. ST, an entity that was jointly established by AB and CD, and that is accounted for as a joint venture in AB's financial statements to 31 December 20X7.
- B. AB's bank that provides more than 60% of the entity's loan finance.
- C. AB's defined benefit pension plan.
- D. The wife of the Managing Director of AB, to whom AB sold a motor vehicle in the year to 31 December 20X7.
- E. AB's main supplier, GH, who supplies more than 70% of AB's goods for manufacture.
Answer: A,C,D
NEW QUESTION 76
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