CIMAPRA19-F02-1 Exam - 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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Beata

6 months ago

$635,000? That seems a bit off, not sure about that one.

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Eden

6 months ago

Definitely going with option C, seems right to me!

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Armanda

6 months ago

Wait, how does the non-controlling interest factor into this?

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India

7 months ago

I think it should be $660,000 based on the numbers given!

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Lashunda

7 months ago

The gain on disposal is calculated as sale proceeds minus net assets.

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Brandee

7 months ago

I believe the goodwill plays a role too, but I'm confused about how it factors into the final gain on disposal.

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James

7 months ago

This question seems similar to one we practiced where we had to consider non-controlling interests. I think that might affect the gain calculation.

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Tamar

8 months ago

I think we need to subtract the carrying amount of the investment from the sale proceeds, but I can't recall the exact formula we used.

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Glory

8 months ago

I remember we discussed how to calculate the gain on disposal, but I'm not sure if I got the net assets part right.

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Tasia

8 months ago

I'm feeling confident about this one. Consolidation questions are my strong suit, and I've practiced similar problems before. I'll work through this methodically and double-check my work.

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Hubert

8 months ago

This seems tricky, but I'm going to give it my best shot. I'll work through it step-by-step and make sure I understand each calculation.

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Lorrine

8 months ago

Hmm, I'm a bit unsure about how to approach this. I'll need to review my notes on calculating gains and losses on disposal of subsidiaries.

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Madelyn

8 months ago

This looks like a straightforward consolidation question. I'll need to calculate the gain on disposal based on the information provided.

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Mozell

8 months ago

Okay, I think I've got this. I just need to calculate the total consideration received, the net assets disposed of, and the goodwill associated with the investment. Then I can determine the gain.

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Glendora

1 year 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

11 months ago

D) $635,000

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Charlena

12 months ago

C) $660,000

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Nikita

1 year ago

A) $590,000

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Fletcher

1 year 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

12 months ago

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

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Cyril

12 months ago

I think it's A) $590,000

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Adelina

1 year 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

1 year ago

A) $590,000

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Amber

1 year 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

1 year ago

A) $590,000

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Darell

1 year 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

1 year 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

11 months ago

D) $635,000

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Isidra

12 months ago

C) $660,000

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Daniel

1 year ago

B) $180,000

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Cherry

1 year ago

A) $590,000

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Dorsey

1 year 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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Yolande

1 year ago

I'm not sure, but I think the gain on disposal is $635,000.

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Amie

1 year ago

I disagree, I believe the gain on disposal is $660,000.

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Quentin

1 year ago

I think the gain on disposal should be $590,000.

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