F1 Exam Dumps : Financial Reporting

The following data has been extracted from GH's accounting records:

What is GH's average inventory days for the year ended 31 March 20X3?

Statements of financial position as at 31 December 20X8 for JK, LM and PQ are as follows:

[1] JK purchased 80% of LM's $1 equity shares on 1 January 20X8 for $260,000 when the retained earnings of JK were $110,000. At that date the non-controlling interest had a fair value of $63,000.

[2] JK purchased 25% of PQ's $1 equity shares on 1 January 20X8 for $90,000 when the retained earnings of PQ were $96,000.

[3] During the year JK sold goods to LM for $32,000 at a mark up of 33.33% on cost. Half of the goods were still in LM's inventory at 31 December 20X8.

[4] LM transferred $32,000 to JK on 30 December 20X8 in settlement of the inter-group trade. JK did not record the cash in its financial records until 2 January 20X9.

Calculate the value of inventory that would be included in JK's consolidated statement of financial position at 31 December 20X8.

Give your answer to the nearest $.

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?