Free CIMAPRO19-F02-1-ENG Exam Questions - Easiest Way for Success

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Total 270 Questions | Updated On: Sep 11, 2024

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Question 1

Which TWO of the following are true in relation to IAS21 The Effects of Changes in Foreign Exchange Rates when consolidating an overseas subsidiary?

A : Acurrent period exchange gain or loss is shown within the consolidated statement of comprehensive income within other comprehensive income.

B : Goodwill is re-translated at the end of each reporting period and reflected at the period end exchange rate in the consolidated statement of financial position.

C : Assets and liabilities of the subsidiary are translated at each reporting date using the average exchange rate for the period.

D : Goodwill is reflected in the consolidated statement of financial position translated at the exchange rate on the date of acquisition.

E : The statement of profit or loss of the subsidiary is translated for the reporting period using the closing exchange rate.

Answer: A,B

Question 2

MS Group's total profit for period on their consolidated income statement is 31,000. This includes adjusting for their share of joint venture JV2. Calculate the share of joint venture MS Group received based on the following information.

MS operating profit 41,000

Dividend from JV2 5,000

Finance cost 3,000

Tax 11,000

A : 4,000

B : 9,000

C : 1,000

D : 7,000

E : 6,000

F : 5,000

Answer: A

Question 3

GG's gearing is currently 50% compared to the industry average of 40% (both measured as debt/equity). GG's debt is all in the form of a single bank loan that is repayable in five years' time. The directors of GG are seeking to raise finance for a new project and they are considering an additional bank loan from the same bank.

Which of the following would prevent the bank from lending the finance for the project in the form of a new bank loan?

A : A covenant on the existing bank loan that restricts the level of dividend that can be paid.

B : A projected decrease in interest cover that would breach a covenant on the existing loan.

C : The revaluation of GG's property that shows an increase in its value since the existing bank loan was taken out.

D : A projected lack of profits to be able to claim tax relief on the additional interest arising from the new loan.

Answer: B

Question 4

W and Y are very similar entities with the same level of profit before interest and tax. However, W has gearing of 95% and Y has gearing of 30%.

Which of the following statements is true?

A : Investing in W carries a higher level of risk than investing in Y.

B : A greater proportion of profit will be available out of which to declare a dividend in W.

C : Investors in Y will expect a higher return than investors in W.

D : Y has a greater commitment to meet interest payments than W.

Answer: A

Question 5

GH owned 70% of the equity share capital of XY at 1 January 20X6. GH acquired a further 20% of XY's equity share capital on 31 December 20X6 for $430,000. Non controlling interest was measured at $600,000 immediately prior to the 20?quisition.

Which of the following amounts will GH debit to non controlling interest when the 20?quisition is adjusted for in its consolidated financial statements at 31 December 20X6?

A : $400,000

B : $120,000

C : $200,000

D : $430,000

Answer: A

Page: 1 / 54

Total 270 Questions | Updated On: Sep 11, 2024

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