F1 Exam Dumps : Financial Reporting

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?

Country ZZ allows the cost of a capital asset to be adjusted for an indexation allowance which takes into consideration the effect of inflation, although the indexation allowance cannot convert a chargeable gain into a chargeable loss.

The following data relates to the sale of an asset ABC has the following working capital ratios at 31 December 20X2:

Dunng the year ended 31 December 20X4 credit purchases wefe $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. March 20X4:

Calculate the chargeable gain or loss in respect of the sale of this asset.

Give your answer to the nearest $.

In accordance with The Conceptual Framework for Financial Reporting, faithful representation is a fundamental qualitative characteristic.

To be a faithful representation financial information must be as far as possible which THREE of the following?