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Which of the following would explain why the yield to maturity is lower than the coupon?
ST has in issue unquoted 7% debentures which were issued at par and are redeemable in 1 year's time. These debentures cannot be traded. The yield to maturity on these debentures has been calculated at 5%. Which of the following would explain why the yield to maturity is lower than...
What is the basic earnings per share for the year ended 30 June 20X5?
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...
Based on the information provided above, how would GH's investment in JK be accounted for in its consolidated financial statements?
GH acquired 3,000,000 of the 12,000,000 equity shares of JK. All shares carried equal voting rights and no other single shareholder of JK held more than 10% of the equity shares. GH has the power to participate in the financial and operating policy decisions but not control them. Based on...
What is the correct accounting treatment for these two items in HJ's financial statements?
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...
Which of the following defines the calculation of interest cover?
Which of the following defines the calculation of interest cover?A . Profit before interest and tax divided by finance costsB . Finance costs divided by profit before interest and taxC . Profit after tax divided by finance costsD . Finance costs divided by profit after taxView AnswerAnswer: A
Which of the following is correct in respect of this operating lease in LM's financial statements for the year to 31 December 20X8?
LM acquired an asset under a 5-year non-cancellable operating lease agreement on 1 January 20X8. Under the terms of the agreement, LM paid nothing for the first year and then made four payments of $50,000 in each subsequent year. LM adopted the provisions of IAS 17 Leases when accounting for...
LM acquired 80% of the equity shares of ST when ST's retained earnings were $50 million.
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...
In which of the following situations would it be appropriate to appraise this project using XY's existing WACC of 10%?
XY has a weighted average cost of capital (WACC) of 10% based on its gearing level (measured as debt/debt+equity) of 40%. It is considering a signficant new project. In which of the following situations would it be appropriate to appraise this project using XY's existing WACC of 10%?A . The...
Which of the following represents the adjustment that AB made to non controlling interest in respect of the disposal when it prepared its consolidated financial statements at 31 December 20X6?
AB owned 80% of the equity share capital of FG at 1 January 20X6. AB disposed of 10% of FG's equity share capital on 31 December 20X6 for $400,000. The non controlling interest was measured at $700,000 immediately prior to the disposal. Which of the following represents the adjustment that...
When accounting for a finance lease under IAS 17 Leases, which TWO of the following are recognised in the statement of profit or loss?
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 . Finance cost element of the lease paymentsB . Depreciation of the leased assetC . Lease payments paidD . Lease payments payableE . Capital repayment element...
