Dependable F1 Exam Dumps to Become CIMA Certified [Q146-Q170] : Exams Labs Braindumps : http://blog.examslabs.com

QUESTION 146
The following information relates to AA.
Extract of Trial Balance at 31 December 20X4;

Notes
(i) Inventory at 31 December 20X4 was valued at cost at $30.
(ii) The loan which was received on 1 July 20X4 is repayable in 20X9.
(iii) Corporate income tax represents an over-provision of tax for the year ended 31 December 20X3. AA reported a loss for tax purposes for the year ended 31 December 20X4 and a tax refund is expected amounting to $20.
(iv) Cost of sales, administration and distribution costs need to be adjusted for the following:
What figures should be entered on the face of the Statement of profit or Loss for the year ended 31 December
20X4 in relation to Interest and Corporate income tax?

Interest $25 Corporate income tax $(37)

Interest $25 Corporate income tax $37

Interest $50 Corporate income tax $(3)

Interest $50 Corporate income tax $3

QUESTION 147
For an incorporated business, the taxation of trading income is a form of direct taxation which is based on:

business profits where the tax is paid by the shareholders to the tax authorities.

dividends paid to shareholders where the tax is paid by the business to the tax authorities.

dividends paid to shareholders where the tax is paid by the shareholders to the tax authorities.

business profits where the tax is paid by the business to the tax authorities.

QUESTION 148
In accordance with IFRS 3 Business Combinations, acquisition accounting of an investment in another entity within the consolidated statement of financial position means that the:

Parent’s and 100% of the other entity’s assets and liabilities are added together line by line.

Group’s share of the net assets of the other entity are shown as one line under non-current assets.

Parent’s and group share of the other entity’s assets and liabilities are added together line by line.

Group’s share of the net assets of the other entity are shown as one line within equity.

QUESTION 149

QUESTION 150
Which of the following is a feature of value added tax (VAT)?

Only registered entities can charge VAT on sales or recover VAT paid on purchases.

The value of all supplies must be taken into account when determining whether the registration threshold has been exceeded.

Entities cannot register for VAT if the value of their taxable supplies is below the registration threshold.

Entities that make only standard-rated or zero-rated supplies have their right to recover input tax restricted.

QUESTION 151
Indicate the possible reasons for the changes identified below to working capital ratios by placing the appropriate reason against each change.

QUESTION 152
It costs PWR £7.50 to produce product H, per product. Product H is typically sold for £89.99. It costs £5.00 to package product H and £15 to deliver product H to customers.
PWR is currently selling faulty versions of product H from a defunct batch, (let’s call this version product I), for 25% of the original price.
Which of the below options represent the correct inventory price for product I?

£2.50

£7.50

£20.00

£3.50

QUESTION 153
Which of the following is a characteristic of a defined contribution post-employment benefit scheme?

The amount of the post-employment benefits paid to former employees depends on how well the scheme’s investments have performed.

The employer would make additional contributions into the scheme if the actuary predicted a shortfall in the funds available to pay post-employment benefits.

The amount of the post-employment benefits paid to former employees is determined at the date of their retirement using a predefined formula.

The employer may take a contributions holiday and stop paying contributions for a period, if the scheme’s assets appear to be more than are required to meet the scheme’s obligations.

QUESTION 154
FG purchased 40% of the equity shares of QR and exerted significant influence over the board of the directors.
QR will be classified as____of FG.

QUESTION 155
The following information has been extracted from GHI’s statement of financial position:

Which of the following is the total cash flow for working capital changes to be recorded in GHI’s statement of cash flows for the year ended 31 December 20X5?

Outflow of $240,000

Inflow of 5120,000

Inflow of $240,000

Outflow of $120,000

QUESTION 156
What does the deduction method of giving double taxation relief mean?

Tax relief is gained by adding the foreign tax from the foreign income so that the gross amount will be subject to tax in the country of residency.

Tax paid in one country may be allowed as a tax deduction another country. Relief is normally restricted to the lower of the foreign or country of residency tax.

Tax relief is gained by deducting the foreign tax from the foreign income so that only the “net” amount will be subject to tax in the country of residency.

Tax paid in one country may be allowed as a tax credit in another country. Relief is normally restricted to the higher of the foreign or country of residency tax.

QUESTION 157
Statements of financial position for YZ, BC and DE at 31 March 20X2 include the following balances:

YZ purchased 90% of BC’s equity shares for $508,000 on 1 January 20X2. On 1 January 20X2 BC’s retained earnings were $183,000. YZ uses the proportion of net assets method to value non-controlling interest at acquisition.
YZ purchased 30% of DE’s equity shares on 1 April 20X1 for $112,000. DE’s retained earnings at 1 April
20X1 were $88,000.
On 1 February 20X2 YZ sold goods to BC for $28,000 at a mark up of 25% on cost. All the goods were still in BC’s inventory at 31 March 20X2.
Calculate the value of inventory that will be included in YZ’s consolidated statement of financial position at 31 March 20X2.
Give your answer to the nearest whole $.

QUESTION 158
XYZ operates in Country A where tax rules state that entertaining costs and donations to political parties are disallowable for tax purposes.
XYZ calculated both its accounting and taxable profits for the year ended 31 December 20X2 after deducting $10,000 of entertaining costs.
It is considering what impact the ruling that “entertaining costs are disallowable for tax purposes” will have on its two profit figures.
Which of the following correctly states the impact of the ruling on the profits already calculated?

Accounting profit will not be affected but taxable profit will increase by $10,000.

Both accounting and taxable profits will increase by $10,000.

Accounting profit will decrease by $10,000 and taxable profit will increase by $10,000.

Both accounting and taxable profits will decrease by $10,000.

QUESTION 159
Which TWO of the following are features of a bank overdraft?

A fixed amount of interest is determined for the period of the overdraft

Repayments are scheduled in advance

The amount off overdraft utilised will fluctuate according to the needs off the borrowing entity.

The bank cannot demand repayment of the overdraft before the end of the agreed period.

Interest is charged on the balance outstanding.

QUESTION 160
The statement of profit or loss for PQ, ST and AB for the year ended 31 December 20X0 are shown below:

1. PQ acquired 80% of its subsidiary, ST, on 1 January 20X0 and 40% of its associate, AB, on 1 September
20X0.
2. Since acquistion PQ has sold goods to ST and AB for $20,000 and $30,000 respectively. At the year end both ST and AB have 50% of these goods remaining in inventory. PQ uses a mark-up of 20% on all of its sales.
3. Since acquisition the goodwill in respect of ST has been impaired by $8,000 and the investment in AB has been impaired by $2,000.
4. PQ uses the fair value method for non-controlling interest at acquisition.
What is the value of the unrealized profit in inventory adjustment required to inventory in PQ’s consolidated statement of financial position at 31 December 20X0?

$3,333

$2,000

$4,000

$1,667

QUESTION 161
In which of the following concepts is profit an increase in the nominal value of capital over a period?

Inflationary capital maintenance

financial capital maintenance

Operating capital maintenance

Physical capital maintenance

QUESTION 162
The accounting profit before tax of an entity was $243,200 for the year ended 31 July 20X4.
The accounting profit included disallowable income from government grants of $48,000 and disallowable expenditure of $25,600 on entertaining expenses.
The entity also paid a $40,000 dividend to shareholders. The tax rates for the country were as follows:

Calculate the tax the entity is due to pay for the year ending 31 July 20X4.

$47,840

$39,174

$57,546

$44,160

QUESTION 163
Identify whether the scenarios below are examples of tax evasion or tax avoidance, by placing either tax evasion of tax avoidance against each one.

QUESTION 164
CDO is an entity that is preparing to apply to its local stock market for a listing. CDO is currently run by a board of ten directors, each of whom manages a department of CDO. The board is chaired by Ms E who is also CDO’s Chief Executive Officer.
Which TWO of the following actions would assist CDO to meet corporate governance regulations?

Separate the roles of Chair of the Board and Chief Executive Officer and appoint different individuals to each role

Ensure that no part of any director’s remuneration is linked to corporate or individual performance

Appoint a number of non-executive directors to the board of CDO.

Allow all directors to vote on their own remuneration increases

Allow the Chief Executive Officer to appoint all new directors when a vacancy arises

QUESTION 165
The United Kingdom (UK) uses a principle based approach to corporate governance which means:

QUESTION 166
LM received notification on 10 November 20X4 from one of its customers stating they had ceased trading as they had gone into liquidation. The balance outstanding at 31 October 20X4 was $150,000.
In accordance with IAS 10 Events after the Reporting Date this event will be treated as:

QUESTION 167
What is the correct classification of a 90-day government bond?

QUESTION 168
BCD owns an item of plant which cost $20,000 and at the time of purchase was assessed to have a useful economic life of 8 years and a residual value of $2,000.
The carrying amount of the plant at 1 January 20X8 is $11,000. On that date BCD’s directors estimate that the plant’s remaining useful life is now 6 years.
The residual value remains unchanged at $2,000.
What is the depreciation charge for this plant for the year ended 31 December 20X8?
Give your answer to the nearest $.

QUESTION 169
Which THREE of the following matters should an entity consider when determining the credit terms granted to a customer?

Typical credit terms operating within the industry

Risk of non-payment

Selling price of the goods being sold to the customer

Bargaining power of the customer

Number of suppliers

Discount offered by suppliers for early payment

QUESTION 170
Which of the following is NOT a type of supply for value added tax (VAT)?

Fixed

Standard-rated

Exempt

Zero-rated