Dec-2021 Realistic F2 Exam Dumps with Accurate & Updated Questions [Q61-Q81]

Dec-2021 Realistic F2 Exam Dumps with Accurate & Updated Questions

F2 Exam Dumps - PDF Questions and Testing Engine

NEW QUESTION 61
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. £1,000
• B. £9,000
• C. £7,000
• D. £6,000
• E. £4,000
• F. £5,000

Answer: E

 

NEW QUESTION 62
When establishing a group structure, which of the following factors need to be considered: Select ALL that apply.

• A. Non-controlling interests
• B. The percentage ownership
• C. Whether control is direct or indirect
• D. Whether control has been established
• E. Goodwill
• F. The date of acquisition
• G. Intra-group investments

Answer: B,D,F

 

NEW QUESTION 63
Which THREE of the following actions should improve the cash position of an entity?

• A. Implementing an efficient inventory ordering system.
• B. Substituting a bonus issue for the final dividend.
• C. Offering extended credit terms to existing customers.
• D. Revaluing all non-current assets.
• E. Selling non current assets and leasing them back under operating leases.
• F. Revising the depreciation policy of non-current assets.

Answer: A,B,E

 

NEW QUESTION 64
RST sells computer equipment and prepares its financial statements to 31 December.
On 30 September 20X5 RST sold computer software along with a two year maintenance package to a customer. The customer is given the right to return the goods within six months and claim a full refund if they are not satisfied with the computer software. The risk of return is considered to be insignificant for RST.
How should the revenue from this transaction and the right of return be recognised in the financial statements for the year ended 31 December 20X5?

• A. Recognise 12.5% of the revenue from both the sale of goods and the maintenance contract and do not create a provision for the anticipated level of returns.
• B. Do not recognise any revenue from the sale of goods or the maintenance contract and do not create a provision for the anticipated level of returns.
• C. Recognise 100% of the revenue from both the sale of goods and the maintenance contract and create a provision for the anticipated level of returns.
• D. Recognise 100% of the revenue from the sale of goods,12.5% of the revenue from the maintenance contract and create a provision for the anticipated level of returns.

Answer: D

 

NEW QUESTION 65
Which of the following statements are INCORRECT with regards to impairment of financial instruments; Select ALL that apply.

• A. Held to maturity instruments and available for sale assets are both measured at amortised cost and are therefore impacted by impairment.
• B. If a loss is suspected following an impairment review, a financial asset is written down to its fair value.
• C. The impairment loss on held to maturity instruments is the difference between the assets carrying amount and the present value of its future cashflows.
• D. If a contract relating to a financial instrument is breached then this might be an indication of impairment.
• E. In the result of an impairment loss, the carrying amount of the asset is directly reduced, or reduced through an allowance account.

Answer: A,B

 

NEW QUESTION 66

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 67
AAA is the only director of entity CD. AAA is also a director of entity GH. CD owns 30% of the equity of MN and 60% of the equity of OP.
Identify which of the following are related parties of CD by placing the appropriate response against one.

Answer:

Explanation:

 

NEW QUESTION 68
Which of the following actions should XY's management take in order to reduce its investment in working capital?

• A. Extend credit terms with its trade customers.
• B. Pay trade suppliers more quickly to take advantage of prompt payment discounts.
• C. Sell its long-term investments and use the proceeds to reduce its bank overdraft.
• D. Scrap its obsolete inventory and replace with new inventory.

Answer: C

 

NEW QUESTION 69
On 1 January 20X4 EF grants each of its 125 employees 500 share options on the condition that they remain in employment for 3 years. During the year to 31 December 20X4 10 employees left and It is expected that a further 25 will leave before the end of the vesting period.
The fair value of each share option is $30 on 1 January 20X4 and $45 on 31 December 20X4.
What is the journal entry in respect of these share options in EF's financial statements for the year ended 31 December 20X4?

• A. Option D
• B. Option B
• C. Option A
• D. Option C

Answer: C

 

NEW QUESTION 70
MNO has calculated its return on capital employed ratio for 20X4 and 20X5 as 41% and 56% respectively.
Taking each statement in isolation, which would explain the movement in the ratio between the 2 years?

• A. In 20X5 the average interest rate on borrowing decreased compared to 20X4.
• B. In 20X4 an onerous contract was provided for and this provision did not change in 20X5.
• C. In 20X5 the increase in value of MNO's head office was reflected in the financial statements.
• D. In 20X4 an unused building was sold at a price in excess of its carrying value.

Answer: B

 

NEW QUESTION 71
ST acquired 75% of the 2 million $1 equity shares of CD on 1 January 20X3, when the retained earnings of CD were S3,550,000. CD has no other reserves.
ST paid $5,600,000 for the shares in CD and the non controlling interest was measured at its fair value of S1,400,000 at acquisition.
At 1 January 20X3, the fair value of CD's net assets were equal to their carrying amount, with the exception of a building. This building had a fair value of $1,000,000 in excess of its carrying amount and a remaining useful life of 25 years on 1 January 20X3.
At 31 December 20X5, the retained earnings of ST and CD were $8,500,000 and $5,250,000 respectively.
What is the figure for non-controlling interest to be shown in the consolidated statement of financial position of ST as at 31 December 20X5?

• A. $1,795,000
• B. $1,607,500
• C. $1,825,000
• D. $1,805,000

Answer: A

 

NEW QUESTION 72
WX acquired 20% of the equity share capital of MN for $135 million in 20X5. WX acquired a further 40% of the equity share capital of MN for $400 million on 1 October 20X8 when the fair value of the net assets of MN were $800 million.
The fair value of the initial 20% investment in MN was $175 million at 1 October 20X8. There has been no impairment of the investment in MN. WX uses the proportion of net assets method to value non- controlling interest at acquisition.
Calculate the goodwill arising on the acquisition of MN.
Give your answer to the nearest $ million.
$ ? million

Answer:

Explanation:
95, 95000000

 

NEW QUESTION 73
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. Fair value at 1 January 20X8 will be used to value the options.
• C. The calculation of the charge for the year will be adjusted for actual and estimated leavers.
• D. The calculation of the charge for the year will be adjusted for actual leavers only.
• E. The credit entry will be to non-current liabilities.
• F. The credit entry will be to equity.

Answer: B,C,F

 

NEW QUESTION 74
RS has issued an instrument with a nominal value of $1 million, at a discount of 2.5%, and a coupon rate of 6%. The terms of the issue are that the instrument must either be redeemed at par, at the option of the holder, in three years' time, or alternatively converted into equity shares in RS.
The characteristics of this instrument taken as a whole indicates that it would be classified as which of the following?

• A. Compound instrument
• B. Debt instrument
• C. Equity instrument
• D. Discounted instrument

Answer: A

 

NEW QUESTION 75
CD reported a balance of $3,000,000 for property, plant and equipment in its individual financial statements at 31 December 20X8.
Calculate the value of the property, plant and equipment that will be included in CD's consolidated statement of financial position.
Give your answer to the nearest $000.
$? 000

Answer:

Explanation:
4481, 4481000,
4481481

 

NEW QUESTION 76
Which of the following options provides a representation of how the non controlling interest in FG is measured in CD's consolidated statement of financial position at 31 December 20X8?

• A. * FV of NCI at reporting date; plus
  * NCI's share of post acquisition reserves of FG; plus
  * NCI's share of exchange difference arising on goodwill of FG for the year.
• B. * FV of NCI at reporting date; plus
  * NCI's share of group reserves; plus
  * NCI's share of accumulated exchange differences arising on goodwill of FG.
• C. * FV of NCI at acquisition; plus
  * NCI's share of post acquisition reserves of FG; plus
  * NCI's share of exchange difference arising on goodwill of FG for the year.
• D. * FV of NCI at acquisition; plus
  * NCI's share of post acquisition reserves of FG; plus
  * NCI's share of accumulated exchange differences arising on goodwill of FG.

Answer: D

 

NEW QUESTION 77
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. Investors in Y will expect a higher return than investors in W.
• B. Y has a greater commitment to meet interest payments than W.
• C. Investing in W carries a higher level of risk than investing in Y.
• D. A greater proportion of profit will be available out of which to declare a dividend in W.

Answer: C

 

NEW QUESTION 78
A group presents its financial statements in A$.
The goodwill of its only foreign subsidiary was measured at B$100,000 at acquisition. There have been no impairments to this goodwill.
Exchange rates (where A$/B$ is the number of B$'s to each A$) are as follows:
The value of goodwill to be included in the group's statement of financial position in respect of its foreign subsidiary for the year ended 31 December 20X4 is:

• A. A$66,667.
• B. A$132,000.
• C. A$75,758.
• D. A$150,000.

Answer: C

 

NEW QUESTION 79
An investor owns 75 shares values at $1.50 each. If the shares increase in value to $1.75, how much money will the investor have made through this capital gain?

• A. $131.25
• B. $187.50
• C. $26.25
• D. $18.75
• E. $112.50
• F. $15

Answer: D

 

NEW QUESTION 80
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 shareholders.
• B. To work out the average return that is required by the company on its investments in order to satisfy all debt holders.
• C. To work out the minimum 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 and debt holders.

Answer: D

 

NEW QUESTION 81
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