For the year ended 31 December 2012, the board of directors of USP Inc. is considering the treatment of the following issues in their financial statements.
(i)On 1 March 2013 one of the machine used for manufacturing trading goods met the criteria to classify as held for sale. The carrying amount of the machine at 31 December was $50,000 and its fair value was $52,000. Costs to sell would amount to $4,600.
(ii)On 15 April 2013, USP Inc. settled a court case with a former employee, paying him $30,000. At the reporting date, the financial statement included a provision of $20,000 in respect of this case.
The financial statements were approved on 30 April 2013.
How should the issues above be dealt with?

• A. (i) Non-adjusting event. Classified as a non-current asset held for sale at $47,400 with a disclosure resulting an impairment loss of $2,600.
  (ii)
  Adjusting event. Provision should be adjusted to $30,000, resulting in a charge to profits of $10,000.
• B. (i) Non-adjusting event. Classified as a non-current asset held for sale at $47,400 with a disclosure resulting an impairment loss of $2,600.
  (ii)
  Non-adjusting event. Provision should be unadjusted. A charge of $10,000 to profits should be made in the following year end financial statements.
• C. (i) Non-adjusting event. Classified as a non-current asset held at its carrying value of $50,000 with a disclosure resulting an impairment loss of $2,600.
  (ii)
  Adjusting event. Provision should be adjusted to $30,000, resulting in a charge to profits of $10,000.
• D. (i) Adjusting event. Classified as a non-current asset held for sale at $47,400 with a disclosure resulting an impairment loss of $2,600.
  (ii)
  Adjusting event. Provision should be adjusted to $30,000, resulting in a charge to profits of $10,000.

Back plc has one associated company, Beyond Ltd, in which Back plc holds 40% of the issued 100,000 $1 ordinary shares. The financial controller of Back plc is unsure how the following transactions should be reflected in the consolidated statement of cash flows and has asked you to confirm the overall impact.
1)In the previous accounting period, Back plc had made a cash advance of $100,000 to Beyond Ltd. During the current accounting period, Beyond Ltd repaid $30,000 of this cash advance.
2)During the current accounting period, Beyond Ltd sold an item of property, plant and machinery at its carrying amount for $20,000 cash.
3)During the current accounting period, Beyond Ltd paid a dividend of 20c per share.
In accordance with IAS 7 Statement of Cash Flows, what is the impact of the above cash transactions on Back plc's consolidated statement of cash flows for the current accounting period?

• A. Dividend received from associate $8,000
• B. Cash from sale of associate's plant $20,000; dividend paid by associate $20,000
• C. Cash from repayment of cash advance from associate $30,000; dividend received from associate $8,000
• D. Cash from repayment of cash advance from associate $30,000; cash from sale of associate's plant $20,000

Debra Ltd. has the following loan finance in place during the year ended 31 December 2012:
$2 million of 6% loan finance
$4 million of 8% loan finance
It constructed a new factory which cost $900,000 and this was funded out of the existing loan finance.
The factory took eight months to complete.
What borrowing costs should be capitalised in the year ended 31 December 2012?

• A. $30,000
• B. $43,980
• C. $36,000
• D. $65,970

On 30 September 2012 the directors of Diego pIc decided to sell the company's services division and the division was classified as held for sale.
The sale is expected to be completed, along with the sales of related assets, in early December 2012. One item of plant within this division had originally cost $30,000 and had a carrying amount of $15,000 on 1 November 2011.
Diego plc will carry on using this plant until it is sold. Diego pIc has a year end of 31 October and depreciates all plant on a monthly straight-line basis using a monthly rate of 1%.
In accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, what amount will berecognizedin the statement of financial position of Diego pIc as at 31 October 2012 in respect of this plant?

• A. $11,400 in current assets
• B. $11,700 in non-current assets
• C. $11,700 in non-current assets held for sale
• D. $11,400 in non-current assets held for sale