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F2 Exam Dumps : F2 Advanced Financial Reporting

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F2 Advanced Financial Reporting Questions and Answers

Question 1

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?

Options:

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.

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Question 2

Which TWO of the following are true for an entity raising equity finance using a rights issue rather than a placing of equity shares to new investors?

Options:

A.

The administration is more complex and therefore likely to be more costly.

B.

The shares will sell at a higher price and therefore generate more funds.

C.

The voting rights of existing shareholders will be unaffected if the shareholders take up their rights.

D.

The cost of underwriting will be lower because the risk of the issue is lower.

E.

The issue will widen the base of shareholders if all shareholders take up their rights.

Question 3

GH's financial statements show the following:

  

What is the value of the dividend received from the associate to be included in GH's consolidated statement of cash flows for the year?

Give your answer to the nearest $000.

 $ ? 000

Options: