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On 1 January 20X2 an entity began work on constructing a factory. It purchased the land for $14 million, built the factory buildings for $11 million and installed plant and equipment for $7 million. The project was completed on 31 December 20X3 when the factory was deemed ready to use, however, the factory did not start operations until 1 June 20X4.

To fund the project the entity borrowed $25 million on 1 January 20X2, with interest at 10% per year.

The loan was repaid in full on 31 December 20X4.

Calculate the total amount to be added to the cost of property, plant and equipment in respect of the above development.

Give your answer to the nearest $ million.

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Question 2

Which THREE of the following must an auditor consider in order to form an opinion on the truth and fairness of an entity's financial statements?

Options:

Whether the entity has kept proper accounting records.

Whether the entity has complied with the relevant legislator requirements in respect of the necessary disclosures.

Whether all the information and explanations necessary for the purposes of the audit have been received.

Whether every transaction that underpins the financial statements has been correctly recorded.

Whether the entity has been exposed to any fraud.

Question 3

Which of the following would be classified as a parent and subsidiary relationship in accordance with IFRS 10 Consolidated Financial Statements?

Options:

Entity A owns 30% of another entity's equity shares and has the power to appoint or remove the majority of the members of the board of directors and control of the entity is through that board.

Entity B owns 20% of another entity's equity shares and has an agreement with other equity shareholders of that entity that gives it power over a further 20% of the equity voting rights.

Entity C owns 45% of another entity's equity shares and can exercise significant influence over that entity's financial and operating policy decisions.

Entity D owns 25% of another entity's equity shares and associated voting rights and 100% of its preference shares.

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