CIMA F2 Exam
Advanced Financial Reporting (Page 4 )

KL sells luxury leather handbags and has 3 stores in exclusive shopping areas. Following years of static revenues and margins, in August 20X6 KL opened a fourth store at a busy airport terminal which is proving to be successful.
The revenue and gross profit of KL for the years ended 31 March 20X7 and 20X6 are as follows:



Which of the following would be a contributing factor to the movement in the gross profit margin of KL?

The following information relates to DEF for the year ended 31 December 20X7:
· Property, plant and equipment has a carrying value of $3,500,000 and a tax written down value of $2,500,000.
· There are unused tax losses to carry forward of $1,250,000. These tax losses have arisen due to poor trading conditions which are not expected to improve in the foreseeable future.
· The corporate income tax rate is 25%.
In accordance with IAS 12 Income Taxes, the financial statements of DEF for the year ended 31 December 20X7 would recognise deferred tax balances of:

At 31 October 20X1 RS has in issue 10% debentures 20X8 with a carrying value of $350,000. Extracts from its statement of profit or loss for the year ending 31 October 20X7 are as follows:



What is the interest cover for RS for the ended 31 October 20X7?

CORRECT TEXT
Information extracted from JK's statement of financial position for the year ended 31 May 20X5 is as follows:



Calculate the gearing ratio (Debt/Equity measured as a percentage) at 31 May 20X5.
Give your answer to one decimal place.
? %

EFG is preparing its financial statements to 31 March 20X8. During the year ended 31 March 20X7, EFG purchased a piece of land for $1 million which is used as the staff car park. EFG has a policy of revaluing land, in accordance with International Accounting Standards, and at 31 March 20X8, accounted for a substantial increase in its value.
Revenue and operating profit has remained constant over the 2 years.
When comparing EFG's financial statements for the year ended 31 March 20X7 with those of 20X8, which THREE of the following would be expected?