CIMAPRA19-F01-1 Exam - Topic 1 Question 63 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 63
Topic #: 1

An entity purchased an asset for $375,000 on 1 November 20X0 incurring legal fees of $33,000. Improvements were made to the asset for $65,000 on 1 December 20X2 which qualified as capital expenditure under the local tax rules. The entity also incurred repair costs on the asset on 1 February 20X3 amounting to $10,000.

The asset was sold for $680,000 on 1 December 20X5 incurring allowable costs on disposal of $15,000.

Indexation on the purchase cost and the improvement are allowable.

The index increased by 20% between November 20X0 and December 20X5,15% between December 20X2 and December 20X5 and 10% between February 20X3 and December 20X5

Calculate the chargeable gain on the disposal of the asset on 1 December 20X5.

A$90,650

B$100,650

C$89,650

D$107,250

Show Suggested Answer

Suggested Answer: B

by Wynell at Dec 28, 2022, 02:49 AM

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Dierdre

4 months ago

Totally agree, the indexation makes a huge difference!

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Moon

4 months ago

Wait, are we sure about those index percentages? Seems high!

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Alisha

4 months ago

I think the indexation really boosts the gain.

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Alaine

4 months ago

Don't forget the improvements of $65,000!

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Rosalia

4 months ago

The purchase cost was $375,000 plus $33,000 in legal fees.

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Evan

5 months ago

I think the chargeable gain calculation is straightforward, but I'm worried I might miscalculate the indexation on the improvements. I hope I remember the right percentages!

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Jamal

5 months ago

I feel like I might have mixed up the allowable costs on disposal with the purchase costs. Did we include legal fees in the base cost?

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Clorinda

5 months ago

This question seems similar to one we practiced where we had to account for improvements and repairs separately. I think the improvements qualify for indexation, but what about the repairs?

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Carry

5 months ago

I remember we discussed how to calculate the indexation allowance, but I'm not sure if I got the percentages right for each period.

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Ernie

5 months ago

This question seems straightforward, but I want to make sure I understand the key factors that affect compensation strategy. I'll need to think through each option carefully.

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Leatha

5 months ago

I think the answer is B. PolyBase is a feature that allows SQL Server to query external data sources, and Azure SQL Database doesn't support that.

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Adelle

5 months ago

Hmm, I'm a bit confused on how to approach this. I know pairwise testing is about covering all possible pairs of variable values, but I'm not sure how to apply that here with the different customer types and account types across two countries.

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Brynn

5 months ago

I have a feeling it was around 1909, but I could be mixing it up with something else we covered.

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