[Jan 17, 2022] Get New F2 Certification – Valid Exam Dumps Questions
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NEW QUESTION 24
On 1 January 20X6 AB, a listed entity, had 10,000,000 $1 ordinary shares in issue. On 1 April 20X6 AB issued 3,000,000 $1 ordinary shares at their full market price. AB's profit was reported as $1,100,000 after charging corporate income tax of $500,000.
Place the correct values for profit and weighted average number of shares in the boxes below that will be used to calculate AB's earnings per share for the year to 31 December 20X6.
Answer:
Explanation:
NEW QUESTION 25
Company A are approached by a wealthy and internationally famous investor shortly before the launch date of their IPO. He tells them that the company do not need to incur all of the cost and risk of an IPO, as he will give them S55 million for 65% equity in the company.
Which of the following statements are also true of the offer? Select ALL that apply.
- A. The investor will want a long term commitment in the company
- B. This offer is from an angel investor
- C. The investor will probably want to manage the company
- D. The offer may ultimately require the majority stakeholder to sell his shares in the company
Answer: B,C,D
NEW QUESTION 26
Which of the following examples of contracts will use cost of sales as the balancing figure when calculating profit or loss?
Select ALL that apply.
- A. Contract A has a total value of£75m, costs to date of£61m and expected costs to completion of£20m.
The contracts % stage of completion was calculated by dividing its value to date of£45m by£75m. - B. Contract A has a total value of£50m, costs to date of£42m and expected costs to completion of£15m.
The project's % stage of completion is 74% using the cost method. - C. Contract A has a total value of£85m, costs to date of£69m and expected costs to completion of£22m.
The contracts % stage of completion was calculated by dividing its costs incurred to date of£69m by £75m. - D. Contract A has a total value of£55m, costs to date of£33m and expected costs to completion of£18m.
- E. Contract A has a total value of£60m, costs to date of£42m and expected costs to completion of£15m.
The project's % stage of completion is 80% using the value method.
Answer: A,E
NEW QUESTION 27
Ratios calculated from the financial statements of ST Group for the years ended 31 August 20X7 and
20X6 are as follows:
Which of the following would have contributed to the movements in these ratios?
- A. During 20X7 ST Group increased the useful life of its vehicles to five years from four and adjusted the depreciation charge accordingly.
- B. ST Group extended its customer base which resulted in an increase in the volume of sales during
20X7. - C. During 20X7 ST Group acquired an associate which made a relatively small profit for the year.
- D. The fair value of an investment acquired in 20X7 and classified as fair value through profit or loss has increased in value by the year end.
Answer: A
NEW QUESTION 28
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$150,000.
- C. A$132,000.
- D. A$66,667.
Answer: A
NEW QUESTION 29
Which TWO of the following are true in relation to IAS21 The Effects of Changes in Foreign Exchange Rates when consolidating an overseas subsidiary?
- A. Goodwill is reflected in the consolidated statement of financial position translated at the exchange rate on the date of acquisition.
- B. Assets and liabilities of the subsidiary are translated at each reporting date using the average exchange rate for the period.
- C. Goodwill is re-translated at the end of each reporting period and reflected at the period end exchange rate in the consolidated statement of financial position.
- D. The statement of profit or loss of the subsidiary is translated for the reporting period using the closing exchange rate.
- E. A current period exchange gain or loss is shown within the consolidated statement of comprehensive income within other comprehensive income.
Answer: C,E
NEW QUESTION 30
LM is preparing its consolidated financial statements for the year ended 30 April 20X5. During the year LM acquired 30% of the equity shares of AB giving it significant influence over AB.
LM conducted ratio analysis comparing the financial performance of the group for 30 April 20X4 and
20X5.
Which of the following ratios would not be comparable as a result of the acquisition of AB?
- A. Operating profit margin.
- B. Return on capital employed.
- C. Interest cover.
- D. Earnings per share.
Answer: D
NEW QUESTION 31
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. $90.00
- B. $100.00
- C. $103.04
- D. $110.25
Answer: D
NEW QUESTION 32
On 30 November 20X9 OPQ acquires a financial asset that is classified as Available for Sale.
Which of the following describes the value of the financial asset on the date of acquisition?
- A. Present value excluding transaction costs.
- B. Present value including transaction costs.
- C. Fair value excluding transaction costs.
- D. Fair value including transaction costs.
Answer: D
NEW QUESTION 33
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?
- A. Profit before tax margin
- B. Non current asset turnover
- C. Return on capital employed
- D. Gross profit margin
Answer: D
NEW QUESTION 34
LM is a car dealer that is supplied inventory by car manufacturer SQ. Trading between LM and SQ is subject to a contractual agreement. This agreement states the following:
* Legal title of the cars remains with SQ until they are sold by LM to a third party.
* Upon notification of sale to a third party by LM, SQ raises an invoice at the price agreed at the original date of delivery to LM.
* LM has the right to return any car at any time without incurring a penalty.
* LM is responsible for insuring all of the cars on its property.
When considering how these cars should be accounted for, which THREE of the following statements are true?
- A. When LM sells a car to a third party, SQ should recognise the revenue associated with that sale.
- B. SQ should recognise the cars as inventory in their financial statements.
- C. The most significant risks attached to the cars are held by SQ.
- D. The most significant risks attached to the cars are held by LM.
- E. LM should recognise the cars as inventory in their financial statements.
- F. SQ should recognise revenue when the cars are delivered to LM.
Answer: A,B,C
NEW QUESTION 35
EF obtained a government licence, free of charge, to operate a silver mine in 20X7 and $5 million was spent on preparing the site. The mine commenced operation on 1 January 20X8. The licence requires that at the end of the mine's useful life of 20 years, the site above ground must be reinstated to its original position.
EF estimated that the cost in 20 years' time of this reinstatement will be $3 million, which has a present value of $1 million at 1 January 20X8.
Which THREE of the following describe how the cost of the reinstatement of the site should be treated in the financial statements of EF in the year ended 31 December 20X8?
- A. The cost of the mine will be increased by $1 million on 1 January 20X8.
- B. There will be a debit to finance costs for the unwinding of the discount on the reinstatement provision.
- C. The cost of the mine will be increased by $3 million on 1 January 20X8.
- D. Depreciation will be charged over 20 years on the full cost of the mine including the reinstatement cost.
- E. Only the cost of the site preparation will be depreciated over the mine's useful economic life.
- F. There will be a credit to finance costs for the unwinding of the discount on the reinstatement provision.
Answer: A,B,D
NEW QUESTION 36
When accounting for a finance lease under IAS 17 Leases, which TWO of the following are recognised in the statement of profit or loss?
- A. Depreciation of the leased asset
- B. Capital repayment element of the lease payments
- C. Lease payments payable
- D. Finance cost element of the lease payments
- E. Lease payments paid
Answer: A,D
NEW QUESTION 37
XY's investments enable it to exercise control over AB and have significant influence over FG and JK.
The Managing Director of XY is a non-executive director of LM. XY does not hold any investment in LM.
XY is preparing its consolidated financial statements for the year ended 30 September 20X9.
Which of the following transactions during the year will be disclosed in these financial statements in accordance with IAS 24 Related Party Disclosures?
- A. Sale of goods from FG to JK at their current market value.
- B. Sale of a motor vehicle from XY to a Director of AB's spouse at its current market value.
- C. Sale of non current assets from XY to LM at their current market value.
- D. Sale of goods with a trade discount to a major customer of XY.
Answer: B
NEW QUESTION 38
Which of the following actions should XY's management take in order to reduce its investment in working capital?
- A. Sell its long-term investments and use the proceeds to reduce its bank overdraft.
- B. Extend credit terms with its trade customers.
- C. Scrap its obsolete inventory and replace with new inventory.
- D. Pay trade suppliers more quickly to take advantage of prompt payment discounts.
Answer: A
NEW QUESTION 39
Which of the following reduce the usefulness of ratio analysis when comparing entities that operate in the same industry? Select ALL that apply.
- A. Accounting estimates in respect of depreciation being different between entities.
- B. Ratio calculations being based on historical information.
- C. The revenue figure being aggregated from many different activities and sources.
- D. The effect of a material and unusual item being disclosed separately in the notes.
- E. Ratios being quick and easy to calculate.
- F. An entity adopting a policy of revaluing its non current assets.
Answer: A,B,C,F
Explanation:
Calculation_F0
NEW QUESTION 40
What figure will be presented in GHI's consolidated statement of changes in equity for the year ended
31 December 20X4, in respect of dividends paid to non-controlling interest?
- A. $0
- B. $100,000
- C. $125,000
- D. $25,000
Answer: D
NEW QUESTION 41
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?
- A. 7.92
- B. 15.83
- C. 10.56
- D. 9.31
Answer: B
NEW QUESTION 42 
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.
$ ? 000
Answer:
Explanation:
14, 14000,
13636, 13637
NEW QUESTION 43
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