CPA Financial Reporting - FR FREE EXAM DUMPS QUESTIONS & ANSWERS

According to the IASB's Conceptual Framework for Financial Reporting, which of the following does an entity's income statement, statement of financial position and statement of cash flows primarily measure?
Income statement Statement ofStatement of financial position cash flows

One plc has owned 100% of Ten Ltd and 60% of Six Ltd for many years. At 31 December 2012 the trade receivables and trade payables shown in the individual company statements of financial position were as follows.
One plcTen LtdSix Ltd $000$000$000 Trade receivable 503040 Trade payable 301520 Trade payable are made up as follows Amount owning to One--Ten 2-4 Six 3-Other suppliers251516
301520
The intra-group accounts agreed after taking into account the following.
1)An invoice for $3,000 posted by Ten Ltd on 31 December 2012 was not received by One pIc until 2 January 2013
2)A cheque for $2,000 posted by One pIc on 30 December 2012 was not received by Six Ltd until 4 January 2013.
What amount should be shown as trade receivables in the consolidated statement of financial position of One plc for the year ended 31 December 2012?

Gale plc has a number of subsidiary companies. On 1 January 2008 Gale plc acquired 30% of the 10,000 $1 ordinary shares of GCM Ltd for $14,000. The balance on GCM Ltd's retained earnings on that date was $30,000. Gale plc exerts significant influence over GCM Ltd. The statement of financial position of GCM Ltd at 31 December 2012 is as follows.
$
Total assets68,000
Ordinary share capital10,000
Retained earnings38,000
Liabilities20,000
Total equity and liabilities68,000
At 31 December 2012 Gale plc had identified an impairment loss of $800 in the value of its investment in GCM Ltd.
At what value will the investment in GCM Ltd be shown in the consolidated statement of financial position of Gale plc as at 31 December 2012?

Richard Ltd and McMagoo Inc. trades in shares and securities and are close rivals for many years. Richard Ltd accuses McMagoo Inc. of providing false information related to a particular PH plc's share; though Richard Ltd knows it is not true. McMagoo Inc. sues Richard Ltd. for defamation. Richard's and McMagoo Inc's lawyers agree that it is likely that McMagoo Inc. will win the case and receive damages of an amount of $1.5m. There is no possibility of the case being resolved before the financial statements are finished.
How the above litigation will be represented in the financial statements of both Richard Ltd and McMagoo Inc.?

Tradus buys a non-current asset on three months credit on 15 December 2012 for 90,000 Roubles. Rates are as follows:
DateRate
15 December 2012$1:10 Roubles
31 December 2012$1:9 Roubles
What are the journal entries to record the transaction at year end?

The net book value of land and buildings at 31 December 2012 of Ruth Ltd was $56,000. Ruth Ltd revalues its land and building at the end of each accounting year. At 31 December 2012 the land and buildings is revalued to $52,600 into the financial statements. The building's remaining life at 1 January 2012 was 8 years. Ruth Ltd does not make an annual transfer from the revaluation reserve to retained earnings in respect of therealizationof the revaluation surplus.
What is the gain / loss on revaluation of land and buildings as at 31 December 2012? Ignore deferred tax on the revaluation surplus.

According to IAS 1 Presentation of Financial Statements, which of the following statements is / are correct?
(i)The accounting policies adopted by a company must be disclosed in the notes to the financial statements
(ii)Inappropriate accounting policies can be rectified by disclosure of the policies used or by the inclusion of explanatory material
(iii)
Companies may choose to prepare their financial statements (except for the statement of cash flows) on either the accrual basis or the cash basis

Plateau Co has the following construction contract in progress: $m Total contract price750 Costs incurred to date225 Estimated costs to completion340 Progress payments invoiced and received290
Calculate the amounts to berecognizedfor the contract in the statement of profit or loss and statement of financial position using the proportion of costs incurred method.
Statement of profit or lossStatement of financial position