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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 the value of goodwill to be included in the consolidated statement of financial position of ST as at 31 December 20X5?

• A. $950,000
• B. $450,000
• C. $570,000
• D. $1,450,000

LK acquired 100% of the equity shares of TU on 1 January 20X4. LK disposed of 60% of TU for £2,400,000 on 30 September 20X4. The sale proceeds reflected the fair value of TU's shares on that date.
The remaining 40% shareholding gave LK the ability to exercise significant influence over the activities of TU. TU reported profit of $1,800,000 for the year ended 31 December 20X4 and this accrued evenly throughout the year.
Calculate the investment in associate that will be presented in LK's consolidated statement of financial position as at 31 December 20X4.
Give your answer to the nearest whole $'000.
$ 000

AB sold the majority of its operating equipment to LM for cash on 30 December 20X9 and then immediately leased it back under an operating lease.
AB used the cash proceeds from the sale to reduce its long term borrowings significantly. No early repayment charge was levied by the lender.
Which of the following statements is true in respect of AB's ratios calculated at 31 December 20X9?

• A. AB's gearing ratio would be lower as a result of this sale being recorded.
• B. AB's non-current asset turnover would be lower as a result of this sale being recorded.
• C. AB's return on capital employed would be lower as a result of this sale being recorded.
• D. AB's current ratio would be lower as a result of this sale being recorded.

Which of the following defines the calculation of interest cover?

• A. Finance costs divided by profit after tax
• B. Finance costs divided by profit before interest and tax
• C. Profit after tax divided by finance costs
• D. Profit before interest and tax divided by finance costs

Which of the following would limit the effectiveness of analysis performed on the operating profit margins of two separate entities with the same total revenue over a12 month period?

• A. Different approaches to allocating expenses to cost of sales, administration expenses and distribution costs.
• B. Different accounting estimates in respect of depreciation of property, plant and equipment.
• C. Different pattern of monthly revenues caused by seasonality.
• D. Different interest rates on loan finance available to the entities.