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CIMA Exam CIMAPRA19-F01-1 Topic 6 Question 82 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam
Question #: 82
Topic #: 6
[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:

Pamela
5 months ago
I agree with Micheal, the answer should be B) $2,000 because of the impairment of goodwill.
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Lera
5 months ago
I'm leaning towards A) $10,000 as the answer.
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Merilyn
5 months ago
I believe the answer is C) $4,000.
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Micheal
5 months ago
I think the answer is B) $2,000.
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Huey
5 months ago
After considering all these factors, we can determine the correct amount that will be shown as the share of profit in PQ's consolidated statement of profit or loss.
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Lacey
5 months ago
Yes, let's start by calculating the total sales to ST and AB, then consider the mark-up, remaining inventory, and impairments.
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Tenesha
6 months ago
So, should we calculate the share of profit of the associate step by step?
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Huey
6 months ago
I believe we should consider the sales to ST and AB, the remaining inventory, and the impairments when calculating the share of profit.
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Lacey
6 months ago
I think we need to calculate the share of profit of the associate based on the information provided.
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Tenesha
6 months ago
This question looks complicated.
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