CIMAPRA19-F01-1 Exam - Topic 3 Question 94 Discussion

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

Question #: 94
Topic #: 3

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.

What is the revenue figure to be included in PQ's consolidated statement of profit or loss for the year ended 31 December 20X0?

A$450,000

B$440,000

C$480,000

D$476,000

Show Suggested Answer

Suggested Answer: C

by Alex at Aug 07, 2024, 03:36 AM

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Louvenia

3 months ago

Totally agree, the fair value method is crucial for NCI!

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Jess

3 months ago

$476,000 seems too specific, is that really the right answer?

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Dean

3 months ago

Wait, how does the impairment impact the revenue figure?

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Shawnta

4 months ago

I think the mark-up affects the revenue calculation!

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Rueben

4 months ago

PQ sold goods worth $20,000 to ST and $30,000 to AB.

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Clorinda

4 months ago

I think the total revenue should include all sales made by PQ, but we have to subtract the unrealized profit from the inventory left with ST and AB. I hope I remember the calculations correctly!

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Miles

4 months ago

I feel a bit confused about the mark-up percentage. Is it applied to the total sales or just the portion that remains in inventory?

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Arminda

4 months ago

This question seems similar to the practice questions where we had to account for non-controlling interests and impairments. I think we need to add back the unrealized profit from ST and AB.

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Freeman

5 months ago

I remember we discussed how to adjust revenue for intercompany sales, but I'm not sure how to calculate the impact of the remaining inventory.

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Melodie

5 months ago

This seems straightforward enough, but I'll double-check my work to ensure I haven't missed any critical steps.

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Antonette

5 months ago

The impairment of goodwill and investment in associate is an important detail I'll need to incorporate into my calculations.

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Lemuel

5 months ago

Okay, I think I've got a handle on this. I just need to calculate the revenue figures and make the necessary adjustments for the intercompany sales and inventory.

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Mollie

5 months ago

This looks like a consolidation question, so I'll need to carefully consider the intercompany transactions and adjustments to the financial statements.

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Kristin

5 months ago

I'm a bit confused by the different acquisition dates and ownership percentages. I'll need to make sure I properly account for the non-controlling interests.

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