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When establishing a group structure, which of the following factors need to be considered: Select ALL that apply.

A.

Whether control has been established

B.

The percentage ownership

C.

The date of acquisition

D.

Non-controlling interests

E.

Goodwill

F.

Intra-group investments

G.

Whether control is direct or indirect

PQ entered into a $300,000 contract on 1 January 20X9 to provide computer hardware to WX with support services for the 3 years from the date of installation.

The contract is made up as follows: 

The hardware was delivered to WX on 1 January 20X9 and installed immediately. WX paid the full value of the contract on 30 June 20X9.

What journal entry records PQ's revenue from this contract for the year ended 31 December 20X9?

A.

Option A

B.

Option B

C.

Option C

D.

Option D

Which of the following statements about ST is true?

A.

The return on the investment in associate on an annual basis is 14%.

B.

The effective tax rate incurred by ST has remained largely the same.

C.

The increase in administrative expenses is in line with the increase in revenues.

D.

The ratio of distribution costs to revenue has increased significantly.

Which THREE of the following statements about preference shares are true?

A.

For an investor, preference shares carry more risk than ordinary shares.

B.

Unlike ordinary shares, preference shares may be cumulative.

C.

The characteristics of preference shares are closer to debt than equity.

D.

Preference shares cannot be issued as redeemable shares.

E.

Preference shareholders receive their dividend entitlement before the equity shareholders.

F.

Preference shareholders rank below the equity shareholders in a winding up.

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 successful in 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.

WX acquired 60% of the equity shares of CD on 1 January 20X3.  WX sold 5% of the equity shares it held for $60,000 on 31 December 20X5. At that date the net assets of CD were $120,000 and the fair value of the non-controlling interest in CD was measured at $21,000. No goodwill arose on the original acquisition of CD.

When preparing its consoldiated financial statements, WX will process which of the following adjustments to its group retained earnings?

A.

A debit of $39,000

B.

A credit of $54,000

C.

A credit of $39,000

D.

A debit of $54,000

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.

$110.25

B.

$103.04

C.

$100.00

D.

$90.00

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

In recent years EBITDA has been adopted by large entities as a key measure of performance. The following figures have been extracted from the financial statements of UV for the year ended 30 November 20X9:  

What is EBITDA for UV for the year ended 30 November 20X9?

Give your answer to the nearest $'000.

$ ? 000

AB acquired a financial investment on 1 January 20X9, incurring $5,000 related agency fees.  AB initially classified the investment as held for trading, in accordance with IAS 32 Financial Instruments: Presentation.

Which of the following statements reflects the accounting treatment that AB adopted in respect of this investment when it prepared its financial statements to 31 December 20X9?

A.

Agency fees were recorded as an expense and the gain/loss on the remeasurement of the investment at the year end was recorded in profit or loss for the year.

B.

Agency fees were recorded as an expense and the gain/loss on the remeasurement of the investment at the year end was recorded in other comprehensive income.

C.

Agency fees were added to the cost of the investment and the gain/loss on the remeasurement of the investment at the year end was recorded in profit or loss for the year.

D.

Agency fees were added to the cost of the investment and the gain/loss on the remeasurement of the investment at the year end was recorded in other comprehensive income.