CIMAPRA19-F02-1 Exam - Topic 1 Question 23 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 23
Topic #: 1

On 1 January 20X7 GH purchased plant and equipment at a cost of $400,000. The temporary differences in respect of this plant and equipment at 31 December 20X7 and 20X8 have been calculated as follows:

Assume that there are no other temporary differences in the periods and that the corporate income tax rate is 25%. GH is expected to have significant taxable profits in the future.

Which of the following is the correct impact in GH's statement of financial position at 31 December 20X8 in respect of deferred tax?

AIncrease in the deferred tax asset.

BIncrease in the deferred tax liability.

CDecrease in the deferred tax asset.

DDecrease in the deferred tax liability.

Show Suggested Answer

Suggested Answer: A

by Aliza at May 10, 2022, 01:32 AM

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Magnolia

4 months ago

Not convinced this impacts the statement like they say.

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Veronika

4 months ago

Wait, are we sure about the tax rate being 25%?

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Lavera

4 months ago

I think it should be a decrease in the deferred tax asset.

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Ruthann

4 months ago

Definitely an increase in deferred tax liability!

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Ettie

5 months ago

GH bought equipment for $400k.

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Karan

5 months ago

I'm a bit confused on this one. Do I need the recovery public key or the server key? I'll have to review the information provided.

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Yuette

5 months ago

I practiced a similar question and I think if the action isn't published, it wouldn't work in Control Room, so maybe C is the answer.

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Anika

5 months ago

I'm a bit confused by this question. I thought we could only create reports from scratch in Access, not convert existing forms. But maybe there's a way to do it that I'm not aware of. I'll have to review my notes on this.

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