CIMA CIMAPRA19-F02-1-ENG F2 Advanced Financial Reporting (Online) Online Training
CIMA CIMAPRA19-F02-1-ENG Online Training
The questions for CIMAPRA19-F02-1-ENG were last updated at Nov 26,2024.
- Exam Code: CIMAPRA19-F02-1-ENG
- Exam Name: F2 Advanced Financial Reporting (Online)
- Certification Provider: CIMA
- Latest update: Nov 26,2024
CORRECT TEXT
The capital structure of ST issummarised in the table below:
What is the weighted average cost of capital of ST?
Give your answer as a percentage to one decimal place.
? %
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$150,000.
- D . A$132,000.
Which of the following actions would be most likely to improve an entity’s gross profit margin?
- A . Negotiating with trade suppliers for a bulk purchase discount
- B . Offering increased credit to customers
- C . Reducing administrative expenses by 10%
- D . Writing down the value of obsolete inventories
JK is seeking to raise finance for a project and the directors would prefer to take out a fixed rate bank loan repayable over the next 5 years. The project will increase the profit of JK even after taking into account the additional interest costs.
Which of the following statements about the use of a bank loan in this situation is true?
- A . In the long term servicing a bank loan is more expensive than servicing equity shares due to the higher risk for the lender.
- B . The interest on a bank loan is deducted from profit before dividends can be declared to equity shareholders each year.
- C . Because the assets of a business belong to the equity shareholders, a bank loan should NOT be secured on the assets of the business.
- D . A bank loan has high issue costs compared to an issue of equity shares because it takes longer to arrange.
XYZ had 600,000 ordinary shares in issue on 1 July 20X4. On 1 January 20X5, the entity made a 1 for 2 bonus issue. The profit attributable to ordinary shareholders for the year ended 30 June 20X5 was $2,925,000.
What is the basic earnings per share for the year ended 30 June 20X5?
- A . $3.25
- B . $4.88
- C . $1.63
- D . $3.90
CORRECT TEXT
EF has redeemable 10% bonds which are currently trading at $94.00 for each $100 of nominal value. Thebondscan 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.
%
HJ is currently in dispute with an employee, who is claiming $400,000 in a legal case against them.
HJ’s legal advisors have stated that it is probable that they will lose the case and will have to pay the amount claimed.
Also, HJ are claiming $250,000 from a supplier of defective goods and the legal advisors have stated that it is probable that HJ will be successfulin this claim.
What is the correct accounting treatment for these two items in HJ’s financial statements?
- A . Provide for the $400,000 potential outflow and disclose the $250,000 potential inflow.
- B . Provide for the $400,000 potential outflow and recognise the $250,000 potential inflow.
- C . Disclose the $400,000 potential outflow and disclose the $250,000 potential inflow.
- D . Disclose the $400,000 potential outflow and recognise the $250,000 potential inflow.
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 . $25,000
- B . $125,000
- C . $100,000
- D . $0
CORRECT TEXT
EF has redeemable 10% bonds which are currently trading at $94.00 for each $100 of nominal value.Thebondscan 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.
%
LM acquired 80% of the equity shares of ST when ST’s retained earnings were $50 million.
The fair value of the net assets of ST included a contingent liability with a fair value of $100 million at the date of acquisition and a fair value of $40 million at 31 December 20X6.
No other fair value adjustments were required at the date of acquisition.
LM and ST had retained earnings of $200 million and $80 million respectively at 31 December 20X6.
The consolidated retained earnings of LM at 31 December 20X6 were:
- A . $164 million
- B . $176 million
- C . $272 million
- D . $284 million
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