CIMAPRA19-F01-1 Exam - Topic 5 Question 81 Discussion

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

Question #: 81
Topic #: 5

The following information is extracted from the statement of financial position for ZZ at 31 March 20X3:

Included within cost of sales in the statement of profit or loss for the year ended 31 March 20X3 is $20 million relating to the loss on the sale of plant and equipment which had cost $100 million in June 20X1.

Depreciation is charged on all plant and equipment at 25% on a straight line basis with a full year's depreciation charged in the year of acquisition and none in the year of sale.

The revaluation reserve relates to the revaluation of ZZ's property.

The total depreciation charge for property, plant and equipment in ZZ's statement of profit of loss for the year ended 31 March 20X3 is $80 million.

The corporate income tax expense in ZZ's statement of profit or loss for year ended 31 March 20X3 is $28 million.

ZZ is preparing its statement of cash flows for the year ended 31 March 20X3.

What figure should be included within cash flows from investing activities for the proceeds of sale of plant and equipment?

A$55 million

B$95 million

C$80 million

D$120 million

Show Suggested Answer

Suggested Answer: A

by Lorean at Feb 08, 2024, 05:30 AM

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Rosalyn

10 months ago

Totally agree, $80 million makes sense with the depreciation!

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Kasandra

10 months ago

Wait, how do we get to $80 million? Sounds off.

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Katie

10 months ago

I think the proceeds should be $80 million.

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Maddie

10 months ago

So, the original cost was $100 million, right?

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Gilma

10 months ago

The loss on sale was $20 million.

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Mariann

10 months ago

I feel like the answer should be around $80 million, considering the loss and depreciation, but I’m not entirely confident in my calculations.

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Sherell

11 months ago

I think the depreciation charged before the sale might help us find the carrying amount of the asset. I just can't recall how to apply it correctly.

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Jospeh

11 months ago

This question seems similar to one we practiced where we had to adjust for depreciation and losses. I think the loss on sale might affect the proceeds we report.

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Lenora

11 months ago

I remember we discussed how to calculate the proceeds from the sale of plant and equipment, but I'm unsure about the exact figures here.

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Maynard

11 months ago

This seems like a straightforward calculation, but I want to double-check my work. I'll review the numbers and formulas to make sure I haven't missed anything.

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Marilynn

11 months ago

Okay, I've got this. The key is to use the information provided about the cost, depreciation, and loss on sale to calculate the proceeds. I'm confident I can get the right answer.

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Gilma

11 months ago

Hmm, I'm a bit confused by all the details in this question. I'll need to carefully read through the information and make sure I understand the key facts before I try to solve it.

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Raelene

11 months ago

This question looks tricky, but I think I can work through it step-by-step. I'll need to calculate the net book value of the plant and equipment sold, then use that to determine the proceeds from the sale.

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William

11 months ago

Okay, let me review the log levels again. FATAL, INFO, ERROR... I think FATAL is the one that's always enabled, but I want to double-check that before submitting my answer.

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Marva

11 months ago

Okay, I think I've got it. The question is asking about the 'metric rank priority' number, so a higher number must take precedence. The answer is C. Higher.

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