F1 Financial Reporting and Taxation Practice Answers

Transcription

1 F1 Financial Reporting and Taxation Practice Answers The Practice Test can be viewed at These answers have been provided by CIMA for information purposes only. In the case of questions where a numerical input is required, the stated answer is given in the format in which it should be input, and also to the appropriate degree of accuracy. Note that a small range of values may be acceptable, for example, to take account of rounding differences, where appropriate. For all other question types, the correct answer(s) are shown. CIMA will not accept challenges to these answers on the basis of academic judgement. These answers do not provide explanation as to why a particular answer is or is not correct students are encouraged to revisit their learning materials to determine the source of any incorrect attempts at answers 1 Factoring of trade receivables. 2 $39.98 loss 3 Setting bounds to the degree of variation allowed in each country An expected gain on the disposal of an old factory site $1,396, Cost of sales: 9,090 Income tax expense: Treasury bills The Chartered Institute of Management Accountants 2014 no reproduction without prior consent

2 12 P acquires 15% of the equity shares in R and can exert significant influence over the financial and operating policy decisions of R. 13 Difficulty in obtaining credit from new suppliers; Reduction in credit rating 15 Where operating results are regularly reviewed by the entity s chief operating decision maker. 16 To ensure tax is paid more quickly 17 The parent entity is itself a wholly owned subsidiary of another entity; The parent entity s debt or equity instruments are not traded in a public market 18 The terms of an overdraft are more easily changed to accommodate different needs within the entity. 19 The entity purchased a furnace five years ago, when the furnace lining was separately identified in the accounting records. The furnace now requires relining at a cost of $320,000. When the furnace is relined it will be able to be used for a further 7 years. 20 Increase the length of credit given to trade receivables $22, orders per year Large price reductions in year 3 to encourage sales 27 There was a fire on 2 May 20X4 in the entity s main warehouse which destroyed 75% of its total inventory. 28 whose tax laws apply to the entity. 29 A brand acquired from another entity at a cost of $1 million. The legal costs of securing a patent for a unique manufacturing technique. The cost of a licence for the use of specialized computer software. 30 Revenues from transactions with other operating segments Amortisation Income tax expenses F1 Financial Reporting and Taxation

3 31 Imputation units Deduct tax at source whenever possible. Change social attitudes by developing an honest and customer friendly tax system a gain of $22, persuade the directors to change the treatment of the item in the accounts. 40 Charge of Going concern Accruals 42 pay $20,000 tax for the year and have no loss to carry forward. 43 part of the fluctuating net current assets and all of the permanent part of the net current assets The creation and optimisation of suitable stakeholder value 46 Available for immediate sale in present condition A reasonable price has been set 47 Germany F1 Financial Reporting and Taxation

4 49 50 Taxpayer is more able to plan spending as income is received net of tax 52 Formal incidence An indirect tax 53 an over-provision of $30, Establish an advisory committee 2. Develop and publish a discussion paper 55 $3, Produce an exposure draft for public comment 4. Amend exposure draft as a result of comments 5. Publish a new or revised IFRS 56 When a business asset is sold at a profit and replaced by another asset, the tax arising on the disposal can be deferred until the replacement asset is sold. 57 $47, F1 Financial Reporting and Taxation

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