CIMAPRA19-F02-1 Exam - Topic 1 Question 70 Discussion

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

Question #: 70
Topic #: 1

ST acquired 75% of the 2 million $1 equity shares of CD on 1 January 20X3, when the retained earnings of CD were S3,550,000. CD has no other reserves.

ST paid $5,600,000 for the shares in CD and the non controlling interest was measured at its fair value of S1,400,000 at acquisition.

At 1 January 20X3, the fair value of CD's net assets were equal to their carrying amount, with the exception of a building. This building had a fair value of $1,000,000 in excess of its carrying amount and a remaining useful life of 25 years on 1 January 20X3.

At 31 December 20X5, the retained earnings of ST and CD were $8,500,000 and $5,250,000 respectively.

What is thefigure fornon-controlling interestto be shown in the consolidated statement of financial position of STas at 31 December 20X5?

A$1,795,000

B$1,607,500

C$1,825,000

D$1,805,000

Show Suggested Answer

Suggested Answer: A, B

by Staci at May 31, 2023, 04:00 AM

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Lynelle

7 months ago

Totally agree, the building's value is key here!

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Elina

7 months ago

Wait, how does that building add up over time?

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Brittani

7 months ago

I think the building's fair value adjustment affects this.

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Sherron

7 months ago

Non-controlling interest is $1.4M at acquisition.

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Gail

8 months ago

ST paid $5.6M for 75% of CD.

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Lashawnda

8 months ago

I feel like I might have mixed up the calculations for the non-controlling interest. I remember we had a similar question, but I can't recall the exact steps we took.

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Joanne

8 months ago

I think the non-controlling interest is based on the fair value at acquisition, but I’m a bit confused about how the retained earnings of CD affect it.

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Mabel

8 months ago

This question seems similar to one we practiced where we had to adjust for fair value differences. I think the excess fair value needs to be amortized over the building's life.

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Aretha

8 months ago

I remember we discussed how to calculate non-controlling interest, but I'm not sure about the adjustments for the building's fair value.

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Blossom

8 months ago

I've got this one! The most important issue is the misapplication of the SPC results and the risk of making incorrect conclusions. That's the biggest concern with using pre-built software for this kind of analysis.

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Dorthy

8 months ago

I vaguely recall something about dynamic firewall importing, but I can't quite remember if it's supported in this context.

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Raina

8 months ago

This is a good test of our understanding of relational database design. I think the key is to recognize that we need a table structure to store the volunteer data, not a view. Option A looks like the way to go.

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Alana

8 months ago

This is similar to a practice question we had on Optimal Gateway routing, and I think the answer is related to how the sites communicate with each other.

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Nadine

8 months ago

I think the answer is A, White Box, but I'm not 100% confident. I'll double-check the definitions just to be sure before submitting my answer.

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Edison

1 year ago

Haha, this question is like a game of Sudoku. Gotta love these types of tricky accounting problems!

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Dannie

1 year ago

This question is like a puzzle! I'm going to carefully work through the numbers step-by-step to make sure I don't miss anything.

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Jacki

11 months ago

After going through the numbers, I believe the correct figure for non-controlling interest is $1,795,000.

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Beckie

12 months ago

I think we need to consider the fair value of the building in our calculations.

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Lindsay

1 year ago

Let's start by calculating the non-controlling interest based on the information given.

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Laura

1 year ago

Why do you think it's C)?

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Alisha

1 year ago

I disagree, I believe the correct answer is C) $1,825,000.

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Laura

1 year ago

I think the answer is A) $1,795,000.

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Dorathy

1 year ago

Why do you think it's C)?

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Paris

1 year ago

Hmm, I think I need to double-check the calculations on this one. The information provided seems a bit tricky, but I'm leaning towards D as the correct answer.

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Miesha

1 year ago

I'm not entirely sure, but I think D is the most likely answer based on the information given.

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Berry

1 year ago

I agree, the information is a bit tricky. But I also think the correct answer is D.

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Roy

1 year ago

I'm pretty sure the answer is C. The non-controlling interest seems to be calculated based on the fair value at acquisition, and the increase in retained earnings of CD over the years.

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Rickie

1 year ago

I disagree, I believe the correct answer is C) $1,825,000.

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Dorathy

1 year ago

I think the answer is A) $1,795,000.

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