CIMAPRA19-F02-1 Exam Dumps and Practice Questions

LM is a car dealer that is supplied inventory by car manufacturer SQ. Trading between LM and SQ is subject to a contractual agreement. This agreement states the following:

* Legal title of the cars remains with SQ until they are sold by LM to a third party.

* Upon notification of sale to a third party by LM, SQraises an invoice at the price agreed at the original date of delivery to LM.

* LM has the right to return any car at any time without incurring a penalty.

* LM is responsible for insuring all of the cars on its property.

When considering how these cars should be accounted for, which THREE of the following statements are true?

What is the total comprehensive incomeattributable to the shareholders of GHI that will be presented in GHI's consolidated statement of changes in equity for the year ended 31 December 20X4?

LM and JK operatein the same countryand prepare their financial statements to30 June 20X6 in accordance with International Accounting Standards. On 27 June 20X6 both entities raised $1 million cashby issuing debt instruments with identical terms and conditions. Prior to this issue both entities were financed entirely by equity.

At 30 June 20X6 the gearing ratios,calculatedasDebt/Equity x 100%, wereas follows:

LM: 30%

JK: 65%

Which of the following independent options would explain the difference between LM and JK's year-end gearing?

GH acquired3,000,000 of the 12,000,000 equity shares of JK. All shares carried equal voting rights and no other single shareholder of JK held more than 10% of the equity shares. GH has the power to participate in the financial and operating policy decisions but not control them.

Based on the information provided above, how would GH's investment in JK be accounted for in its consolidated financial statements?

AB sold the majority of its operating equipment to LM for cash on 30 December 20X9 and then immediately leased it back under an operating lease.

AB used the cash proceeds from the sale to reduce its long term borrowings significantly. No early repayment charge was levied by the lender.

Which of the following statements is truein respect of AB's ratios calculated at 31 December 20X9?