CD acquired 100% of the equity share capital of FG for cash consideration of Kr1,200,000 on 1 January
20X7.
Retained earnings of FG at the date of acquisition was Kr800,000. CD operates from Country A and its functional and presentation currency is $. FG is located and trades throughout Country B and its functional currency is the Krona (Kr).
CD has no other subsidiaries. Goodwill had not suffered any impairment to date.
Summarised data from the statements of financial position for both entities at 31 December 20X7 is presented below:

Calculate the exchange difference arising on the retranslation of goodwill on the acquisition in the consolidated statement of financial position of CD at 31 December 20X7.
Give your answer to the nearest $000.

14, 14000, 13636, 13637

JKL measure gearing as debt:equity, based on book values. At 31 December 20X5 the ratio is 2:3 and JKL would like this to be 2:5.
Which of the following transactions individually would achieve this?

• A. Bonus issue from the share premium account.
• B. Revaluation of investment property to an increased fair value.
• C. Repayment of a 6 year term loan with the issue of 5 year redeemable debentures.
• D. Issue of redeemable preference shares at par.

Information from the financial statements of RST for the year ended 30 April 20X9 is as follows:

At 30 April 20X9 the ordinary shares are trading at $4.75.
What is the price earnings (P/E) ratio for RST at 30 April 20X9?

• A. 9.31
• B. 7.92
• C. 10.56
• D. 15.83

In the year ended 31 December 20X7, FG leased a piece of machinery. The accountant of FG had prepared the financial statements for the year to 31 December 20X7 on the basis of the lease being an operating lease.
However, following the end of year audit it has been agreed that the machinery is in fact held under a finance lease and therefore the financial statements need to be corrected.
The correction will have which THREE of the following affects on the financial statements?

• A. Finance costs will increase.
• B. Non-current liabilities will decrease.
• C. Non-current assets will decrease.
• D. Non-current assets will increase.
• E. Current liabilities will increase.
• F. Depreciation costs will decrease.

On 1 January 20X7 GH purchased plant and equipment at a cost of $400,000. The temporary differences in respect of this plant and equipment at 31 December 20X7 and 20X8 have been calculated as follows:

Assume that there are no other temporary differences in the periods and that the corporate income tax rate is 25%. GH is expected to have significant taxable profits in the future.
Which of the following is the correct impact in GH's statement of financial position at 31 December 20X8 in respect of deferred tax?

• A. Increase in the deferred tax liability.
• B. Decrease in the deferred tax asset.
• C. Increase in the deferred tax asset.
• D. Decrease in the deferred tax liability.