[Jan 20, 2022] F2 Test Engine files, F2 Dumps PDF
Latest CIMA F2 PDF and Dumps (2022) Free Exam Questions Answers
NEW QUESTION 20
What figure will be presented for "dividend paid to shareholders of GHI" in GHI's consolidated statement of changes in equity for the year ended 31 December 20X4?
Give your answer to the nearest $000.
$ ? 000
Answer:
Explanation:
500, 500000
NEW QUESTION 21
XY has in issue a 6% convertible bond which is redeemable at par or convertible into equity shares in one year's time. The conversion terms are 20 equity shares for each $100 of convertible bond. The conversion value in one year's time is expected to be $105 per $100 nominal of the bond based on the current share price of $5.25.
Which of the following statements about the bond is correct?
- A. If the bond is redeemed rather than converted that means that the investor will receive $105 for each
$100 of nominal value. - B. The yield to maturity of the convertible bond is a constant 6%.
- C. XY's post tax cost of debt for the convertible bond will be higher than the yield to maturity.
- D. The bond will be converted into equity shares in one year's time if the share price does not change.
Answer: D
NEW QUESTION 22
You are a Financial Controller at BCD and are in the process of preparing the year-end financial statements. A member of your finance team has come to see you about her provisions balance at year- end.
She says that the Managing Director has asked her to increase the provisions balance by $1 million overall. She thinks this is because BCD has had a very good year in terms of profit, and the Managing Director wants to put some profit aside to protect against any future reductions in profit. $1 million is material to BCD.
You believe that the provisions balance was fairly stated without the additional $1 million.
Which TWO of the following would be appropriate actions in this scenario?
- A. Speak to the Managing Director to explain that the level of provisions is governed by financial reporting standards.
- B. Discuss the matter with the Finance Director as he is your immediate line manager.
- C. Contact the external auditors of BCD and tell them that the Managing Director wants to change the provisions balance.
- D. Speak to the shareholders at the upcoming annual general meeting about this issue.
- E. Tell the member of your finance team to ignore the Managing Director and to leave the provisions balance as it was.
Answer: A,B
NEW QUESTION 23
How would KL account for its investment in MN in its consolidated financial statements for the year to
31 December 20X9?
- A. Subsidiary
- B. Joint venture
- C. Joint arrangement
- D. Financial asset
Answer: B
NEW QUESTION 24
UV entered into a five year non-cancellable operating lease for an asset two years ago. Lease payments are settled annually in arrears.
At the year end, UV no longer requires this leased asset as they have decided to discontinue the product line that it was used for.
At this date UV had made two out of the five lease payments.
Which of the following statements about the unavoidable lease payments is true in accordance with IAS
37 Provisions, Contingent Liabilities and Assets?
- A. The amount of the unavoidable lease payments should be ignored in the financial statements.
- B. A provision should be recognised for the unavoidable lease payments with a corresponding charge to other comprehensive income.
- C. The amount of the unavoidable lease payments should be disclosed in the financial statements with no corresponding accounting entry.
- D. A provision should be recognised for the unavoidable lease payments with a corresponding charge to profit or loss.
Answer: D
NEW QUESTION 25
CD has 200,000 equity shares with a current market value of $2.50 each. The annual dividend of $0.50 a share is about to be paid.
CD also has redeemable debt with a nominal value of $100,000.
This is currently trading at $90 for each $100 of nominal value.
The cost of equity is 20% and the post tax cost of debt is 6%.
What is CD's weighted average cost of capital?
Give your answer in % to one decimal place. ? %
Answer:
Explanation:
17.4, 17.42, 17.43, 17.40
NEW QUESTION 26
Company A are approached by a wealthy and internationally famous investor shortly before the launch date of their IPO. He tells them that the company do not need to incur all of the cost and risk of an IPO, as he will give them S55 million for 65% equity in the company.
Which of the following statements are also true of the offer? Select ALL that apply.
- A. The investor will want a long term commitment in the company
- B. This offer is from an angel investor
- C. The investor will probably want to manage the company
- D. The offer may ultimately require the majority stakeholder to sell his shares in the company
Answer: B,C,D
NEW QUESTION 27
What is the total comprehensive income attributable to the non-controlling interest that will be presented in GHI's consolidated statement of changes in equity for the year ended 31 December 20X4?
- A. $575,000
- B. $95,000
- C. $595,000
- D. $190,000
Answer: B
NEW QUESTION 28
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 29
What is meant by the term "a placing of ordinary shares"?
- A. Selling new ordinary shares to a financial institution on a pre-arranged basis.
- B. Selling new ordinary shares to existing shareholders.
- C. Selling new ordinary shares directly to the public.
- D. Selling existing ordinary shares to new investors through a stock exchange.
Answer: A
NEW QUESTION 30
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 $350,000
- D. Credit of $50,000
Answer: C
NEW QUESTION 31
CD acquired 100% of the equity share capital of FG for cash consideration of Kr1,200,000 on 1 January
20X7.
Retained earnings of FG at the date of acquisition was Kr800,000. CD operates from Country A and its functional and presentation currency is $. FG is located and trades throughout Country B and its functional currency is the Krona (Kr).
CD has no other subsidiaries. Goodwill had not suffered any impairment to date.
Summarised data from the statements of financial position for both entities at 31 December 20X7 is presented below:
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.
Answer:
Explanation:
14, 14000, 13636, 13637
NEW QUESTION 32
Information from the financial statements of an entity for the year to 31 December 20X5:
The gearing ratio calculated as debt/equity and interest cover are:
- A. gearing of 16% and interest cover of 4.
- B. gearing of 15% and interest cover of 4.
- C. gearing of 16% and interest cover of 6.
- D. gearing of 15% and interest cover of 6.
Answer: D
NEW QUESTION 33
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. Any shares that were issued on acquisition of the subsidiary will be shown separately on the statement of cash flows within financing activities.
- B. 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.
- C. 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.
- D. 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.
- E. 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.
Answer: B,D
NEW QUESTION 34
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 classifed as which of the following?
- A. Compound instrument
- B. Discounted instrument
- C. Equity instrument
- D. Debt instrument
Answer: A
NEW QUESTION 35
FGH plans to issue a large number of shares to the public via an IPO.
It is considering either an offer for sale at a fixed price or an offer for sale by tender.
Which of the following would be an advantage to FGH of using the offer for sale by tender compared to the fixed price offer?
- A. Tenders are more attractive to less sophisticated investors thus maximising potential investment.
- B. The shares will be sold to different investors at differing values thus maximising the capital raised.
- C. There is potential for reaching a higher share price thus maximising capital raised.
- D. There would be more certainty over the issue price of the shares.
Answer: C
NEW QUESTION 36
......
Pass Your CIMA Management F2 Exam on Jan 20, 2022 with 212 Questions: https://www.realvce.com/F2_free-dumps.html