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Candidates who pass the CIMA F1 exam demonstrate proficiency in financial reporting and analysis, which are essential skills for any finance professional. F1 exam is particularly important for individuals who are pursuing a career in management accounting, financial management, or corporate finance. It is also a valuable credential for professionals who want to enhance their expertise in financial reporting and analysis.
NEW QUESTION # 86
Refer to the exhibit.
An entity sells 2,000 bags of product X each year. It has been estimated that the cost of holding one bag of product X is £4.
The cost of placing an order is £250.
where:
Co = cost of placing an order
Ch = cost of holding one unit in inventory for one year
D = annual demand
Calculate the Economic Order Quantity (EOQ) for bags of product X.
Give your answer to the nearest whole number of bags.
Answer:
Explanation:
500 bags
NEW QUESTION # 87
ABC has the following working capital ratios at 31 December 20X2:
During the year ended 31 December 20X4 credit purchases were $1,700,000 and at 31 December 20X4 the outstanding trade payables balance was $340,000
Calculate the working capital cycle for ABC.
Give your answer to the nearest whole number of days and assume there are 365 days in a year.
Answer:
Explanation:
Pending
NEW QUESTION # 88
Which THREE of the following are principles identified by the Code of Ethics?
- A. Professional behavior
- B. Neutral
- C. Professional competence and expertise
- D. Understandability
- E. Confidentiality
- F. Professional competence and due care
Answer: A,E,F
NEW QUESTION # 89
WX is considering an investment in ST.
At 31 December 20X2 ST had the following balances in its statement of financial position:
Which of the following would cause ST to become an associate investment of WX?
- A. WX purchases 25,000 of ST's $1 equity shares.
- B. WX purchases 75,000 of ST's $1 equity shares.
- C. WX purchases 15,000 of ST's $1 equity shares and 20,000 of ST's $1 preference shares.
- D. WX purchases 50,000 of ST's $1 preference shares.
Answer: A
NEW QUESTION # 90
Statements of financial position for FG, IJ and KL at 31 December 20X5 include the following balances:
FG acquired 90% of IJ's equity shares for $358,000 on 1 July 20X5 when IJ's retained earnings were
$98,000.
FG acquired 100% of KL's equity shares for $360,000 on 1 January 20X5 when KL's retained earnings were $155,000.
FG used the proportion of net assets method to value non-controlling interests at acquisition.
KL sold a piece of land to FG for $130,000 on 1 September 20X5. At the date of transfer the land had a carrying value of $50,000.
The management of FG expect KL to make profits in the future and no impairment ot its goodwill was proposed at 31 December 20X5.
Calculate the value of property, plant and equipment to be recognized in FG's consolidated statement of financial position at 31 December 20X5.
Give your answer to the nearest whole $.
Answer:
Explanation:
$1180000
NEW QUESTION # 91
Which of the following is the main purpose of corporate governance regulation?
- A. To guarantee that corporate scandals do not happen in the future.
- B. To protect the interests of shareholders in a quoted entity.
- C. To ensure that financial reports are produced on a regular basis and in line with relevant regulations.
- D. To ensure that shareholder wealth is maximized.
Answer: B
NEW QUESTION # 92 
Answer:
Explanation:
NEW QUESTION # 93
It costs PWR £7.50 to produce product H, per product. Product H is typically sold for £89.99. It costs £5.00 to package product H and £15 to deliver product H to customers.
PWR is currently selling faulty versions of product H from a defunct batch, (let's call this version product I), for 25% of the original price.
Which of the below options represent the correct inventory price for product I?
- A. £7.50
- B. £3.50
- C. £2.50
- D. £20.00
Answer: C
NEW QUESTION # 94
AB has prepared its financial statements for the year ended 31 July 20X5. On 15 September 20X5 a major fraud was uncovered by the external auditors which had taken place during the year to 31 July 20X5 The financial statements have not yet been authorised In accordance with IAS 10 Events After the Reporting Period, AB should treat the fraud as:
Answer:
Explanation:
Pending
NEW QUESTION # 95
FG purchased 40% of the equity shares of QR and exerted significant influence over the board of the directors.
QR will be classified as____of FG.
Answer:
Explanation:
NEW QUESTION # 96
Which THREE of the following would be included in a cash budget?
- A. Impairment of goodwill
- B. Salaries paid to staff
- C. Depreciation on machinery
- D. Interest payments
- E. Dividends received from associate
- F. Profit on disposal of motor vehicle
Answer: B,D,E
NEW QUESTION # 97
Corporate governance is the means by which an entity is operated and
Answer:
Explanation:
NEW QUESTION # 98
BC manufactures product X and on 1 February 20X4 started a project to develop a new material for use in its production. The development project is due to be completed by 31 December 20X4 with the new material being used in production from 1 January 20X5. The development project costs have been reliably estimated at $200,000 and it is anticipated that the new material will increase the margin achieved on product X by 20%.
You are a CIMA accountant within BC and are considering how to treat the development costs of
$200,000 in the financial statements for the year ended 31 December 20X4.
In accordance with the ethical principle of professional competence and due care, which of the following statements correctly explains how these costs should be accounted for?
- A. Expense to profit or loss because the development has not changed the nature of product X.
- B. Capitalise and amortise from 1 February 20X4 because this is the date that the project commenced.
- C. Expense to profit or loss because the development project will be completed by the end of the year.
- D. Capitalise but do not amortise until 1 January 20X5 because this is the date that the new material will start to be used.
Answer: D
NEW QUESTION # 99
Which THREE of the following statements are NOT true of the IFRS Foundation trustees?
- A. Receive funding by donations from the general public
- B. Responsible for appointing members of the IA5B
- C. Are involved in the technical matters relating to accounting standards
- D. Are mainly from Europe and the USA
- E. Responsible of appointing members of the IFRS interpretations committee
Answer: A,C,D
NEW QUESTION # 100
Company R use a defined benefit plan pension scheme. Employee UW has been working for Company R for 25 years. The defined benefit plan is 1.5% of the employee's annual salary during their time at the company, for every year of employment.
Employee UW started on a £18,000 per annum salary. After 10 years of employment. Employee UW received a promotion and began earning £22,000. After another 3 years of employment. Employee UW got promoted to a wage of £35,000, and is still on this salary now. How much pension has Employee UW accumulated since working at Company R?
- A. £18,000
- B. £9,375
- C. £6,750
- D. £9,900
Answer: D
NEW QUESTION # 101
The statement of profit or loss for PQ, ST and AB for the year ended 31 December 20X0 are shown below:
1. PQ acquired 80% of its subsidiary, ST, on 1 January 20X0 and 40% of its associate, AB, on 1 September
20X0.
2. Since acquistion PQ has sold goods to ST and AB for $20,000 and $30,000 respectively. At the year end both ST and AB have 50% of these goods remaining in inventory. PQ uses a mark-up of 20% on all of its sales.
3. Since acquisition the goodwill in respect of ST has been impaired by $8,000 and the investment in AB has been impaired by $2,000.
4. PQ uses the fair value method for non-controlling interest at acquisition.
What is the value of the unrealized profit in inventory adjustment required to inventory in PQ's consolidated statement of financial position at 31 December 20X0?
- A. $3,333
- B. $2,000
- C. $4,000
- D. $1,667
Answer: D
NEW QUESTION # 102
In Country X, trading losses in any year can be carried back and set off against trading profits in the previous year, with any unrelieved losses carried forward to set against the first available trade profits in future years.
GH had the following taxable profits and losses in years 20X1 to 20X4:
What are the taxable profits for 20X4, assuming the most efficient use of the loss is made?
- A. $65,000
- B. $70,000
- C. $95,000
- D. $100,000
Answer: C
NEW QUESTION # 103 
Answer:
Explanation:
NEW QUESTION # 104
XYZ has the following data relating to the forecast sale of goods for the quarter to 31 December 20X2:
XYZ expects trade receivables to be settled as follows:
* 20% in the month of sale, by offering a settlement discount of 5%;
* 30% in the month following sale, and
* the remainder, after allowing for irrecoverable debts, in the subsequent month
$10,000 of the sales made in October 20X2 are expected to be irrecoverable What is the forecast amount to be received by XYZ from trade receivables in December 20X2?
- A. $123 000
- B. $122000
- C. $132,000
- D. $133 000
Answer: D
NEW QUESTION # 105
An entity had a current tax liability of $187,000 in its statement of financial position as at 30 September 20X5.
It was subsequently negotiated and eventually agreed with the tax authorities that the entity would pay $192,000 and this was paid on 6 January 20X6.
The entity's management estimate that the tax due on profits for the year to 30 September 20X6 is $231,000.
Calculate the entity's corporate income tax expense included in its statement of profit or loss for the year ended 30 September 20X6.
Give your answer to the nearest whole $000.
Answer:
Explanation:
$236000
NEW QUESTION # 106
What does the exemption method of giving double taxation relief mean?
- A. The countries agree on certain types of income which will be exempt or partially exempt in both countries.
- B. The countries agree that all types of income will be exempt or partially exempt in both countries.
- C. The countries agree that all types of income will be exempt or partially exempt in one country or the other.
- D. The countries agree on certain types of income which will be exempt or partially exempt in one country or the other.
Answer: D
NEW QUESTION # 107
Which THREE of the following actions, considered in isolation, would increase the working capital cycle of an entity?
- A. Increase the credit period available to customers.
- B. Change to a Just-in-Time approach to manage inventory.
- C. Reduce the selling prices charged to customers.
- D. Take advantage of new bulk purchase discounts available.
- E. Take longer to pay suppliers for purchases.
- F. Remove a prompt payment discount available to customers.
Answer: A,D,F
NEW QUESTION # 108
Indicate the possible reasons for the changes identified below to working capital ratios by placing the appropriate reason against each change.
Answer:
Explanation:
NEW QUESTION # 109
Statements of financial position for YZ, BC and DE at 31 March 20X2 include the following balances:
YZ purchased 90% of BC's equity shares for $508,000 on 1 January 20X2. On 1 January 20X2 BC's retained earnings were $183,000. YZ uses the proportion of net assets method to value non-controlling interest at acquisition.
YZ purchased 30% of DE's equity shares on 1 April 20X1 for $112,000. DE's retained earnings at 1 April
20X1 were $88,000.
On 1 February 20X2 YZ sold goods to BC for $28,000 at a mark up of 25% on cost. All the goods were still in BC's inventory at 31 March 20X2.
Calculate the goodwill arising on the acquisition of BC.
Give your answer to the nearest whole $.
Answer:
Explanation:
$118300
NEW QUESTION # 110
......
To prepare for the CIMA F1 exam, candidates must have a solid foundation in financial accounting and management accounting. They should have a good understanding of accounting concepts and financial reporting standards, as well as a strong grasp of financial analysis techniques. Candidates can prepare for the exam by taking online courses, attending review classes, and studying exam materials such as past papers and textbooks. With the right preparation and a solid understanding of financial reporting, candidates can pass the CIMA F1 exam and take the first step towards a rewarding career in management accountancy.
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