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QUESTION: 56

CORRECT TEXT
KL has just completed their inventory count and has ascertained that the cost value of the inventory is $460,000; this was made up of 10,000 units of component part FF. A week before the year end the FF components were moved to a temporary warehouse. Two weeks later they were inspected and found to have been damaged by the damp conditions in the temporary warehouse.
Of the 10,000 units 2,500 of them were damaged. After remedial work of $5.00 per unit KL anticipates they will be able to sell the damaged parts for $32.00 per unit.
What is the value for closing inventory to be included in the financial statements of KL? Give your answer to the nearest $.

$412500

Answer(s): A

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QUESTION: 57

CORRECT TEXT
GH's tax liability at 30 June 20X3 in respect of the tax charge on the profits for the year ended 30 June 20X3 is $876,000.
There was an over provision of $105,000 that related to the tax charge on the profits for the year ending 30 June 20X2.
What amount should be shown in GH's statement of profit or loss for the year ending 30 June 20X3? Give your answer to the nearest $.

$771000

Answer(s): A

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QUESTION: 58

What does the exemption method of giving double taxation relief mean?

The countries agree that all types of income will be exempt or partially exempt in one country or the other.
The countries agree on certain types of income which will be exempt or partially exempt in one country or the other.
The countries agree on certain types of income which will be exempt or partially exempt in both countries.
The countries agree that all types of income will be exempt or partially exempt in both countries.

Answer(s): B

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QUESTION: 59

A building was purchased on 1 January 20X1 for $300,000 and had a useful economic life of 40 years. On 1 January 20X5 the building was revalued by a professional surveyor at $450,000. Directors decided to incorporate the revalued amount into the financial statements. The accounting entries to record the initial revaluation of the building in the financial statements for the year ended 31 December 20X5 will be to debit building cost $150,000 and then:

credit accumulated depreciation $37,500 and credit revaluation reserve $112,500.
credit accumulated depreciation $30,000 and credit revaluation reserve $120,000.
debit accumulated depreciation $30,000 and credit revaluation reserve $180,000.
debit accumulated depreciation $37,500 and credit revaluation reserve $187,500.

Answer(s): C

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QUESTION: 60

What does the tax credit method of giving double taxation relief mean?

Tax paid in one country may be allowed as a tax credit in another country. Relief is normally restricted to the lower of the foreign or country of residency tax.
Tax paid in one country may be allowed as a tax credit in another country. Relief is normally restricted to the higher of the foreign or country of residency tax.
Tax relief is gained by deducting the foreign tax from the foreign income so that only the "net" amount will be subject to tax in the country of residency.
The countries agree on certain types of income which will be exempt or partially exempt in one country or the other.

Answer(s): A

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Free F1 Exam Braindumps Financial Reporting Questions 56–60 (page: 13)

QUESTION: 56

QUESTION: 57

QUESTION: 58

QUESTION: 59

QUESTION: 60

Free F1 Exam Braindumps
Financial Reporting Questions 56–60 (page: 13)