Practice Examples and Dumps & Tips for 2022 Latest F2 Valid Tests Dumps
Latest [Feb 19, 2022] 100% Passing Guarantee - Brilliant F2 Exam Questions PDF
NEW QUESTION 11 
Calculate the exchange difference arising on the retranslation of goodwill on the acquisition in the consolidated statement of financial position of CD at 31 December 20X7.
Give your answer to the nearest $000.
$ ? 000
Answer:
Explanation:
14, 14000,
13636, 13637
NEW QUESTION 12
Information from the financial statements of RST for the year ended 30 April 20X9 is as follows:
At 30 April 20X9 the ordinary shares are trading at $4.75.
What is the price earnings (P/E) ratio for RST at 30 April 20X9?
- A. 10.56
- B. 15.83
- C. 9.31
- D. 7.92
Answer: B
NEW QUESTION 13
PQ and WX are similar sized entities and operate in the same industry within Country X . Both operate from a single warehouse and have similar levels of non current asset resources.
The following ratios have been calculated at 31 October 20X8:
If considered individually, which of the following would limit the usefulness of these ratios in assessing the comparative financial performances of PQ and WX?
- A. Year end review of equipment resulting in WX charging an impairment loss while PQ's equipment is not impaired.
- B. Operating lease rentals for plant and equipment being charged to administration expenses by PQ and distribution costs by WX.
- C. Depreciation of warehouses being charged to cost of sales by PQ and distribution costs by WX.
- D. Increased prices for raw materials, which was passed on to customers by both entities.
Answer: C
NEW QUESTION 14
AB acquired its subsidiary on 1 January 20X7 when the fair value of net assets was the same as book value with the exception of property, plant and equipment that had a fair value $500,000 higher than carrying value.
These assets were assessed to have a remaining useful life of 5 years from the date of acquisition.
What is the net consolidation adjustment to the property, plant and equipment balance at 31 December
20X9?
Give your answer to the nearest whole number (in '$000s).
$?
Answer:
Explanation:
200000, 200
NEW QUESTION 15
The dividend yield of ST has fallen in the year to 31 May 20X5, compared to the previous year.
The share price on 31 May 20X4 was $4.50 and on 31 May 20X5 was $4.00. There were no issues of share capital during the year.
Which of the following should explain the reduction in the dividend yield for the year to 31 May 20X5 compared to the previous year?
- A. The profit for the year fell significantly and the dividend per share stayed the same.
- B. Surplus cash was used to pay a special dividend in addition to the normal dividend in the year.
- C. To compensate investors for the reduction in share price a higher dividend per share was paid.
- D. The dividend paid in the year was reduced in order to pay for new assets.
Answer: D
NEW QUESTION 16
Which of the following best describes the goal of WACC as a measure?
- A. To work out the average return that is required by the company on its investments in order to satisfy all debt holders.
- B. To work out the minimum return that is required by the company on its investments in order to satisfy all shareholders and debt holders.
- C. To work out the average return that is required by the company on its investments in order to satisfy all shareholders and debt holders.
- D. To work out the average return that is required by the company on its investments in order to satisfy all shareholders.
Answer: C
NEW QUESTION 17
AB's financial information shows that the non current assets' carrying value is greater than the tax base at the year end.
What is the journal entry to record the movement in the provision for deferred tax resulting from this difference?
- A. Dr Deferred tax provisionCr Other comprehensive income
- B. Dr Tax expenseCr Deferred tax provision
- C. Dr Deferred tax provisionCr Tax expense
- D. Dr Other comprehensive incomeCr Deferred tax provision
Answer: B
NEW QUESTION 18
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% acquisition.
Which of the following amounts will GH debit to non controlling interest when the 20% acquisition is adjusted for in its consolidated financial statements at 31 December 20X6?
- A. $120,000
- B. $200,000
- C. $430,000
- D. $400,000
Answer: D
NEW QUESTION 19
Which TWO of the following are TRUE in respect of preparing a consolidated statement of cash flows where there has been an acquisition of a subsidiary part way through the year?
- A. Investing activities will include a total cash outflow for the acquisition comprising the cash paid for the subsidiary less the cash held by the subsidiary at the acquisition date.
- B. The working capital held by the subsidiary at acquisition will be excluded from the year end figures based on the percentage shareholding in the subsidiary.
- C. The year end cash and cash equivalents balance will be reduced by the cash and cash equivalents that were held by the subsidiary at the acquisition date.
- D. Any shares that were issued on acquisition of the subsidiary will be shown separately on the statement of cash flows within financing activities.
- E. Non-controlling interest will arise in relation to the subsidiary and any dividends paid to the non- controlling interest will be shown within financing activities as a cash outflow.
Answer: A,E
NEW QUESTION 20
On 1 January 20X1 KL acquired 75% of the equity shares of PQ. Goodwill arising on the acquisition was
$480,000. On 31 December 20X3 KL sold the full investment of PQ to XY Group for $2,000,000. On this date the net assets of PQ were $1,340,000 and the non-controlling interests stood at $410,000.
What is the gain on disposal to be recognised in the consolidated statement of profit or loss of KL?
- A. $590,000
- B. $635,000
- C. $660,000
- D. $180,000
Answer: B
NEW QUESTION 21
AB and CD are competitors supplying components to the car manufacturing industry. AB operates in Country X and CD operates in Country Y.
Both entities were incorporated on the same day, are the same size and prepare financial statements to 31 March each year using international accounting standards.
Which of the following statements taken individually would limit the usefulness of the comparison of the return on capital employed ratio between the two entities?
- A. The average rate of borrowing is 2% in Country X and 7% in Country Y.
- B. The corporate tax rate is 25% in Country X and 40% in Country Y.
- C. The currency is Dollar in Country X and Krona in Country Y.
- D. The average rate of inflation is 3% in Country X and 10% in Country Y.
Answer: D
NEW QUESTION 22
ST acquired two financial investments in the year to 31 December 20X8. One of these investments was initially classified as held for trading, the other as available for sale. ST remeasured both investments at fair value at 31 December 20X8 in accordance with IAS 39 Financial Instruments: Recognition and Measurement. The resulting gains were calculated as follows:
* Gain on held for trading investment $50,000
* Gain on available for sale investment $40,000
What was the value of the gain that ST presented in its other comprehensive income when it prepared its financial statements for the year to 31 December 20X8?
Give your answer to the nearest $000.
$ ? 000
Answer:
Explanation:
40, 40000
NEW QUESTION 23
An entity has declared a dividend of $0.12 a share. The cum dividend market price of one equity share is
$1.40.
Assuming a dividend growth rate of 7% a year, what is the entity's cost of equity?
- A. 16.2%
- B. 17.0%
- C. 9.4%
- D. 8.6%
Answer: B
NEW QUESTION 24
AB owned 80% of the equity share capital of FG at 1 January 20X6. AB disposed of 10% of FG's equity share capital on 31 December 20X6 for $400,000. The non controlling interest was measured at
$700,000 immediately prior to the disposal.
Which of the following represents the adjustment that AB made to non controlling interest in respect of the disposal when it prepared its consolidated financial statements at 31 December 20X6?
- A. Debit of $400,000
- B. Debit of $350,000
- C. Credit of $50,000
- D. Credit of $350,000
Answer: D
NEW QUESTION 25
The directors of AB want to reduce the entity's gearing ratio in the year to 31 December 20X9.
Which of the following independent actions could the directors take during 20X9 to achieve this?
- A. Issue redeemable preference shares.
- B. Issue cumulative preference shares.
- C. Recognise the valuation surplus on AB's property, plant and equipment.
- D. Switch AB's fixed interest bearing borrowing to a lower variable rate borrowing.
Answer: C
NEW QUESTION 26
GH is seeking to finance a substantial new project that is guaranteed to enhance the profitability of the entity. Its key determinants in deciding upon the best source of finance are to balance the following requirements:
1) to minimise the costs of issue of the finance;
2) to avoid the need to find cash to repay the source of finance; and
3) to ensure that the long-term gearing level does not increase.
Which of the following financing options best meets these requirements?
- A. Convertible loan stocks
- B. A term loan
- C. Redeemable preference shares
- D. Initial public offering of ordinary shares
Answer: A
NEW QUESTION 27
MNO is listed on its local stock exchange. It has a high level of gearing compared to the industry average as a result of rapid expansion funded by debt. The directors of MNO would like to reduce the level of gearing by raising equity to fund the next expansion project. The directors are considering whether to use a placing of new shares or a rights issue.
Which of the following statements is true?
- A. A placing will increase the proportion of the total number of MNO's shares held by large investors.
- B. A rights issue would not need to be underwritten because the risk of the shares not being taken up is small compared to a placing.
- C. The directors must use a placing before offering the rights issue to existing shareholders.
- D. The administration costs associated with a placing are usually more expensive than a rights issue because less investors are involved.
Answer: A
NEW QUESTION 28
Which of the following would cause a deferred tax balance to be included in the statement of financial position for an entity?
- A. The acquisition of plant and equipment a year ago where the tax depreciation rate is different to the accounting depreciation rate.
- B. The acquisition of land for which there is no tax depreciation.
- C. Impairment of goodwill that arose on the acquisition of a subsidiary entity.
- D. Expenses in the statement of profit or loss which are not allowable for tax creating a permanent difference.
Answer: A
NEW QUESTION 29
AB and FG incorporated on 1 January 20X1 in the same country and had similar investment in net assets.
Both entities are financed entirely by equity. In the year to 31 December 20X1 both entities generated the same volume of sales.
Which of the following, taken individually, would explain why AB's return on capital employed ratio was lower than that of FG?
- A. AB's deferred tax provision at the year end is higher than that of FG.
- B. AB revalued its non current assets upwards on 31 December 20X1; FG's non current assets were stated at historic cost.
- C. AB paid a lower dividend to its shareholders than FG in the year.
- D. FG issued bonds on 31 December 20X1; AB remains ungeared.
Answer: B
NEW QUESTION 30
CD granted 1,000 share options to its 100 employees on 1 January 20X8.To be eligible, employees must remain employed for 3 years from the grant date. In the year to 31 December 20X8, 15 staff left and a further 25 were expected to leave over the following two years.
The fair value of each option at 1 January 20X8 was $10 and at 31 December 20X8 was $15.
Which THREE of the following are true in respect of recording these share options in the year ended 31 December 20X8?
- A. Fair value at 31 December 20X8 will be used to value the options.
- B. The credit entry will be to non-current liabilities.
- C. The calculation of the charge for the year will be adjusted for actual leavers only.
- D. Fair value at 1 January 20X8 will be used to value the options.
- E. The calculation of the charge for the year will be adjusted for actual and estimated leavers.
- F. The credit entry will be to equity.
Answer: D,E,F
NEW QUESTION 31
JK is seeking to raise new finance through a rights issue of equity shares.
Which THREE of the following statements are correct?
- A. Entities have the opportunity to underwrite a rights issue.
- B. The administration costs associated with a rights issue are higher than those for an initial public offering.
- C. Shareholders must pay the full market price for shares offered in a rights issue.
- D. Shareholders' entitlement to rights may be sold on their behalf.
- E. A rights issue will dilute an existing shareholder's control of the entity if they do not take up their rights.
- F. An alternative name for a rights issue is a scrip issue of shares.
Answer: A,D,E
NEW QUESTION 32
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 projected lack of profits to be able to claim tax relief on the additional interest arising from the new loan.
- 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 covenant on the existing bank loan that restricts the level of dividend that can be paid.
Answer: B
NEW QUESTION 33
AB acquired an investment in a debt instrument on 1 January 20X5 at its nominal value of $25,000, which it intends to hold until maturity. The instrument carried a fixed coupon interest rate of 5%, payable in arrears. Transactions costs of $5,000 were paid in respect of this investment. The effective interest rate applicable to this instrument was estimated at 9%.
Calculate the value of this investment that AB will include in its statement of financial position at 31 December 20X5.
Give your answer to the nearest whole number.
$ ?
Answer:
Explanation:
31450
NEW QUESTION 34
FG's statement of profit or loss account for year ended 31 December 20X1 is:
What is the operating profit margin for FG for the year ended 31 December 20X1?
Give your answer to the nearest whole %.
? %
Answer:
Explanation:
14
NEW QUESTION 35
......
F2 are Available for Instant Access: https://www.passtorrent.com/F2-latest-torrent.html