CIMA Exam CIMAPRA19-F02-1 Topic 5 Question 100 Discussion

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

Question #: 100
Topic #: 5

On 1 January 20X1KL acquired 75% of the equityshares of PQ. Goodwill arising on the acquisition was $480,000. On 31 December 20X3 KLsold the full investment of PQ to XY Groupfor $2,000,000. On this date the net assetsof PQ were $1,340,000 and the non-controlling interests stood at $410,000.

What is the gain on disposal to be recognised in the consolidated statement of profit or loss of KL?

A$590,000

B$180,000

C$660,000

D$635,000

Show Suggested Answer

Suggested Answer: A

by Gail at Sep 19, 2024, 04:57 PM

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Glendora

3 months ago

I bet the person who wrote this question was just sitting in their cubicle, cackling maniacally, thinking 'let's see if they can figure this one out!'

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Martha

2 months ago

D) $635,000

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Charlena

2 months ago

C) $660,000

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Nikita

3 months ago

A) $590,000

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Fletcher

4 months ago

Okay, time to put on my accounting superhero cape and solve this puzzle! Let's do this, one step at a time.

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Rodolfo

2 months ago

Yes, I agree. It should be A) $590,000.

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Cyril

2 months ago

I think it's A) $590,000

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Adelina

3 months ago

That makes sense. So, $2,000,000 - $1,340,000 = $660,000. But we also need to consider the non-controlling interests of $410,000. So, $660,000 - $410,000 = $250,000. Therefore, the gain on disposal should be $590,000.

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Lynsey

3 months ago

A) $590,000

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Amber

3 months ago

I think it's A) $590,000 because we need to calculate the gain on disposal by subtracting the net assets of PQ from the selling price to XY Group.

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Rosendo

3 months ago

A) $590,000

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Darell

4 months ago

Oh man, this is a real brain-teaser. I sure hope I don't mess up the math and end up with the wrong answer. That would be a total 'KL' on my part.

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Tresa

4 months ago

Alright, let's see. The selling price is $2,000,000, the net assets are $1,340,000, and the non-controlling interest is $410,000. Looks like I need to do some serious number-crunching here.

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Gracia

2 months ago

D) $635,000

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Isidra

2 months ago

C) $660,000

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Daniel

3 months ago

B) $180,000

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Cherry

3 months ago

A) $590,000

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Dorsey

4 months ago

Hmm, this seems like a tricky one. Gotta remember that goodwill is part of the investment, so it should be factored in when calculating the gain on disposal.

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