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CIMA Exam CIMAPRA19-F01-1 Topic 1 Question 104 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam
Question #: 104
Topic #: 1
[All CIMAPRA19-F01-1 Questions]

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.

Calculate the amount that will be shown as the share of profit of associate in PQ's consolidated statement of profit or loss for the year ended 31 December 20X0.

Show Suggested Answer Hide Answer
Suggested Answer: B

Contribute your Thoughts:

Lavelle
2 months ago
Forget the calculator, I'm just going to guess C. $4,000 and hope for the best. These accounting questions always make my head spin!
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Michell
2 months ago
Hmm, this is a tough one. I'm leaning towards A. $10,000, but I could be missing something. Anyone else feel like they need a calculator to work this out?
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Gilberto
2 months ago
I'm going with B. $2,000. The question mentions that PQ acquired 40% of AB, so the share of profit should be 40% of AB's profit, which is $5,000.
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Donte
20 days ago
Hmm, now that you mention it, I think you're right. B. $2,000 does make more sense based on the information provided.
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Lera
29 days ago
I see your point, but I still think it's B. $2,000. The share of profit should be 40% of AB's profit, which is $5,000 after impairment.
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Christiane
1 months ago
I see your point, but I still think B. $2,000 is the right answer. It should be 40% of AB's profit, which is $5,000, taking into account the impairment.
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Helene
1 months ago
I disagree, I believe the correct answer is D. $3,200. The share of profit should be 40% of AB's profit, which is $8,000 after impairment.
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Twana
1 months ago
I think the answer is C. $4,000. It should be 40% of AB's profit, which is $10,000, considering the impairment of $2,000.
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Kanisha
1 months ago
I disagree, I believe the correct answer is D. $3,200. The share of profit should be 40% of AB's profit, which is $8,000 after impairment.
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Hassie
2 months ago
I think the answer is C. $4,000. The question states that PQ acquired 40% of AB, so the share of profit should be 40% of AB's profit, which is $10,000.
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Ramonita
2 months ago
I believe the correct answer is D) $3,200 because of the impairments mentioned in the statement.
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Venita
2 months ago
D. $3,200 sounds more accurate to me. The impairment of the investment in AB has to be taken into account, which reduces the share of profit.
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Elvis
2 months ago
D) $3,200
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Cathrine
2 months ago
D) $3,200
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Sheldon
2 months ago
I'm not sure about that. I think the answer might be A) $10,000.
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Sueann
2 months ago
I think the correct answer is C. $4,000. The goodwill impairment and the mark-up on sales make the calculations a bit tricky, but I'm pretty sure this is the right answer.
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Shelba
1 months ago
Yes, the key is to carefully analyze each piece of information given in the question to arrive at the correct answer.
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Orville
1 months ago
I calculated it as well and got the same answer, $4,000. It's important to consider all the factors mentioned in the question.
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Gerardo
1 months ago
I agree with you, the mark-up on sales and the impairment of goodwill definitely add complexity to the calculation.
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Cathrine
2 months ago
I think the correct answer is C. $4,000. The goodwill impairment and the mark-up on sales make the calculations a bit tricky, but I'm pretty sure this is the right answer.
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Helaine
2 months ago
I agree with you. The share of profit of associate in PQ's consolidated statement of profit or loss should be $4,000.
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Minna
3 months ago
I think the answer is C) $4,000.
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