Summer Special 60% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: bestdeal

Free CIMA F1 Practice Exam with Questions & Answers | Set: 7

Questions 61

The following information is extracted from the trial balance of YY at 30 September 20X3.

F1 Question 61

i. Included in revenue is a refundable deposit of $20 million for a sales transaction that is due to take place on 14 October 20X3.

ii. The cost of closing inventory is $28 million, however, the net realisable value is estimated at $25 million.

iii. The interest free loan was obtained on 1 January 20X3. The loan is repayable in 12 quarterly installments starting on 31 March 20X3. All installments to date have been paid on time.

Calculate the figure that should be included within non-current liabilities in YY's statement of financial position at 30 September 20X3 in respect of both of the loans outstanding at the year end?

Give your answer to the nearest $ million.

Options:
CIMA F1 Premium Access
Questions 62

JKL prepares its financial statements to 31 December each year. For the year ended 31 December 20X5 inventory was held for 76 days on average.

The directors of JKL decide to reduce the average inventory level to $6.5 million from 1 January 20X6 JKL's revenue for 20X6 is $54 million on which a gross profit margin of 20% is earned.

Assuming that the average receivables and payables days remain constant what will be the effect of the expected reduction in inventory on JKL's working capital cycle for the year ended 31 December 20X6?

Options:
A.

An increase of 32 days

B.

An increase of 21 days

C.

A reduction of 32 days

D.

A reduction of 21 days

Questions 63

Country X charges corporate income tax at the rate of 20% on all income irrespective of whether it is paid out as a dividend. Country Y charges corporate income tax at the rate of 25% on all income.

An entity, AA, which is resident in Country X pays a dividend of $100,000 to another entity, BB, which is resident in Country Y.

Countries X and Y have a double taxation treaty which adopts the exemption method in respect of this type of transaction.

What is BB's liability to tax in Country Y in respect of the dividend income received?

Options:
A.

No tax will be payable.

B.

Tax will be payable at 20%.

C.

Tax will be payable at 25%.

D.

Tax will be payable at 25% less a credit given for the 20% already paid by AA in Country X.

Questions 64

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

Options:
A.

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

B.

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

C.

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

D.

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.

Questions 65

XYZ is a manufacturer. Which of these should be classified as other comprehensive income in XYZs statement of profit or loss and other comprehensive income for the year ended 31 December 20X4?

Options:
A.

Interest received on savings

B.

Revaluation surplus on properly

C.

Dividend income from investments

D.

Gain on disposal of machinery

Questions 66

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

F1 Question 66

Options:
Questions 67

Which of the following would be found under the heading "other comprehensive income" in the statement of total comprehensive income?

Options:
A.

Gain or loss on revaluation of a non-current asset

B.

Income from investments

C.

Dividends paid

D.

Increase or decrease in provision for irrecoverable debts

Questions 68

An entity's inventory days are 45 days.

An entity ceased to manufacture a product in 20X4. Raw materials used solely in the manufacture of that product are still held in inventory at 31 December 20X4.

Place the appropriate response below to show how inventory days will be affected if this raw material inventory is written off as obsolete.

F1 Question 68

Options:
Questions 69

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

F1 Question 69

Options:
Questions 70

Entity RH has an recognised a taxable profit of $1.Smillion for 20X1'. In Entity RH's resident country. Country M, depreciation charges and entertaining expenses are disallowed expenses. Below is some information on

Entitry RH's outgoings for the period:

Depreciation charged on PPE: $450,000

Political donations: $155,000

Staff parties: $3,200

Cost of updating assets: $10,000

Other expenses: $83,500

In Country M, there is a standard corporation tax of 12% charged on all corporation profits. What is Entity RH's total tax liability for this period?

Options:
A.

$234,384

B.

$125,616

C.

$254,184

D.

$252,984