CIMA Advanced Financial Reporting - F2 FREE EXAM DUMPS QUESTIONS & ANSWERS

LK acquired 100% of the equity shares of TU on 1 January 20X4. LK disposed of 60% of TU for £2,400,000 on 30 September 20X4. The sale proceeds reflected the fair value of TU's shares on that date.
The remaining 40% shareholding gave LK the ability to exercise significant influence over the activities of TU. TU reported profit of $1,800,000 for the year ended 31 December 20X4 and this accrued evenly throughout the year.
Calculate the investment in associate that will be presented in LK's consolidated statement of financial position as at 31 December 20X4.
Give your answer to the nearest whole $'000.
$ 000

As at 31 October 20X7 TU's financial statements show the entity having profit after tax of $600,000 and
900,000 $1 ordinary shares in issue. There have been no issues of shares during the year. At 31 October
20X7 TU have 300,000 share options in issue, which allow the holders to purchase ordinary shares at
$2 a share in 3 years' time. The average price of the ordinary shares throughout the year was $5 a share.
What is the diluted earnings per share for the year ended 31 October 20X7?

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 AB made to non controlling interest in respect of the disposal when it prepared its consolidated financial statements at 31 December 20X6?

Which of the following is NOT an example of an unconsolidated structured entity as defined in IFRS12 Disclosure of Interests in Other Entities?

BC are currently seeking to establish an accounting policy for a particular type of transaction.
There are four alternative ways in which this transaction can be treated. Each treatment will have a different outcome on the financial statements as follows:
* Treatment one means that the financial statements will be easier to prepare.
* Treatment two will give a fair representation of the transaction in the financial statements.
* Treatment three will maximise the profit figure presented in the financial statements.
* Treatment four means that the financial statements will be more easily understood by shareholders.
Which accounting treatment should BC adopt?

Which of the following should be eliminated when using the equity method to account for associates in a parent's financial statements?
Select ALL that apply.

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?

YZ issued $100,000 6% convertible bonds at par on 1 January 20X5. The bondholders have the option to convert into equity shares in 3 years' time or redeem at par for cash on the same date.
Interest is paid annually in arrears and bonds issued by similar entities without conversion rights pay interest at 8%.
What is the value of equity to be recognised in YZ's statement of financial position as at 31 December
20X5?
Give your answer to the nearest whole $.
$?

AB acquired an investment in a debt instrument on 1 January 20X5 at its nominal value of $25,000, which it intends to hold until maturity. The instrument carried a fixed coupon interest rate of 5%, payable in arrears. Transactions costs of $5,000 were paid in respect of this investment. The effective interest rate applicable to this instrument was estimated at 9%.
Calculate the value of this investment that AB will include in its statement of financial position at 31 December 20X5.
Give your answer to the nearest whole number.
$ ?

An entity has declared a dividend of $0.12 a share. The cum dividend market price of one equity share is
$1.40.
Assuming a dividend growth rate of 7% a year, what is the entity's cost of equity?

What is the total comprehensive income attributable to the non-controlling interest that will be presented in GHI's consolidated statement of changes in equity for the year ended 31 December 20X4?

The IAS definitions of financial instruments dictate their classification between debt and equity. Which of of the following factors might this classification impact?
Select ALL that apply.