CIMA Updated F1 Exam Questions and Answers by jiya

Refer to the exhibit.

An entity sells 2,000 bags of product X each year. It has been estimated that the cost of holding one bag of product X is £4.

The cost of placing an order is £250.

where:

Co = cost of placing an order

Ch = cost of holding one unit in inventory for one year

D = annual demand

Calculate the Economic Order Quantity (EOQ) for bags of product X.

Give your answer to the nearest whole number of bags.

In accordance with The Conceptual Framework for Financial Reporting, faithful representation is a fundamental qualitative characteristic.

To be a faithful representation financial information must be as far as possible which THREE of the following?

The statement of profit or loss for PQ, ST and AB for the year ended 31 December 20X0 are shown below:

1. PQ acquired 80% of its subsidiary, ST, on 1 January 20X0 and 40% of its associate, AB, on 1 September 20X0.

2. Since acquistion PQ has sold goods to ST and AB for $20,000 and $30,000 respectively. At the year end both ST and AB have 50% of these goods remaining in inventory. PQ uses a mark-up of 20% on all of its sales.

3. Since acquisition the goodwill in respect of ST has been impaired by $8,000 and the investment in AB has been impaired by $2,000.

4. PQ uses the fair value method for non-controlling interest at acquisition.

What is the value of the unrealized profit in inventory adjustment required to inventory in PQ's consolidated statement of financial position at 31 December 20X0?

LM received notification on 10 November 20X4 from one of its customers stating they had ceased trading as they had gone into liquidation. The balance outstanding at 31 October 20X4 was $150,000.

In accordance with IAS 10 Events after the Reporting Date this event will be treated as: