CIMA Exam CIMAPRA19-F02-1 Topic 4 Question 108 Discussion

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

Question #: 108
Topic #: 4

KL acquired 2 million $1 equity shares in MN on 18 July 20X0 for $1.65 a share and classified this investment as available for sale (AFS) in accordance with IAS 39 Financial instruments: Recognition andMeasurement.

KL paid a 0.5% transaction fee to its broker on this transaction. MN's shares were trading at $1.78 on 31 December 20X0.

Which of the following journals records the subsequent measurement of this investment at 31 December 20X0?

AOption

BOption

COption

Show Suggested Answer

Suggested Answer: A

by Sage at Mar 07, 2025, 11:09 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F02-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Jesus

29 days ago

Option C is the way to go! Now if only I could figure out how to invest like KL and make a cool 8% return on my shares. Maybe I should ask the broker for a 0.5% discount...

upvoted 0 times

Jacob

2 days ago

Investing like KL sounds like a good idea, especially with that 8% return on shares.

upvoted 0 times

...

Georgeanna

16 days ago

I agree, option C is the correct choice for recording the subsequent measurement of the investment.

upvoted 0 times

...

Justine

1 months ago

Ah, the joys of accounting standards. I wonder if the exam writers get a kick out of seeing us squirm over these financial instrument questions. At least it's not as bad as trying to decipher the tax code!

upvoted 0 times

Cassi

13 days ago

It's all part of the learning process, we just have to keep practicing and studying.

upvoted 0 times

...

Nell

16 days ago

I agree, it can be challenging to understand all the rules and regulations.

upvoted 0 times

...

Herminia

18 days ago

I know, these accounting standards can be tricky to navigate sometimes.

upvoted 0 times

...

Veronika

1 months ago

It's definitely a challenge, but it's all part of the learning process.

upvoted 0 times

...

Dalene

1 months ago

Hmm, this one's a bit tricky. I'm going to go with option C, but I hope the exam doesn't have any of those 'trick questions' that make you second-guess yourself!

upvoted 0 times

...

Mertie

2 months ago

I think option C is the correct answer here. The investment should be measured at fair value, and the increase in value from the acquisition price to the market price on 31 December 20X0 should be recorded in other comprehensive income.

upvoted 0 times

Marjory

27 days ago

Yes, the increase in value from the acquisition price to the market price on 31 December 20X0 should be recorded in other comprehensive income.

upvoted 0 times

...

Shonda

1 months ago

I agree, option C is the correct answer. The investment should be measured at fair value.

upvoted 0 times

...

Wava

2 months ago

I'm not sure, but I think option B could also be a possible journal entry.

upvoted 0 times

...

Malissa

2 months ago

This question is testing our understanding of how to account for available-for-sale (AFS) investments under IAS 39. The key is to recognize that the investment should be measured at fair value, with the change in fair value recorded in other comprehensive income.

upvoted 0 times