12. Which one of the following would be internal evidence of impairment? New technological innovations were producing better machines. 0.b. There were legal and regulatory changes affecting the operating of the machine O c The economic performance of the machine had declined. Od There was an unexpected fall in the market value of the machine 11. On 30 September 2020 the impairment review was carried out. The following amounts were established in respect of the machine: Carrying amount $850,000, Value in use $760,000, Fair value $850,000 and costs of disposal $30,000. What should be the carrying amount of the machine following the impairment review? a $850,000 b: $790,000 OC $760,000 Od $820,000 on 13. Melody entered into a contract to construct an asset for a customer on 1 January 2020 which is expected to last 24 months. The agreed price for the contract is $5 million At 30 September 2020, the costs incurred on the contract were $1.6 million and the estimated remaining costs to complete were $2.4 million. On 20 September 2020, Melody received a payment from the customer of $1.8 million which was equal to the full amount billed. Melody calculates the progress on the basis of amount billed compared to the contract price. What amount would be reported in Melody's statement of financial position as at 30 September 2020? O a $200,000 b. Nil Oc$800,000 Od $160,000 15. Evaluate the following items which has correctly been included in Granite's revenue for theyear? O a $2 million in relation to a fee negotiated for an advertising contract for Rees, one of Granite's clients. Granite acted as an agent during the deal and is entitled to 10% commission O b. $500,000 relating to a sale of specialised equipment on 31 December 20X1. The full sales value was $700,000 but $200,000 relates to servicing that Granite will provide over the next 2 years, so Granite has not included that in revenue this year. OC $800,000 relating to a sale of some surplus land owned by Granite, Od $1 million in relation to a sale to a new customer on 31 December 20X1. Control passed to the customer on 31 December 20X1 The $1 million is payable on 31 December 20X3. Interest rates are 10% 14. Which ONE of the following is NOT one of the five steps for recognising revenue according to IFRS 15 Revenue from Contracts with Customers? O. Determine the transaction price .b. Ascertain whether control over the goods has passed or not O c Identity the contract Od Recognise revenue when (or as the entity satisfies a performance obligation Clear my choice 18. Which of the following is/are TRUE about sales and leaseback? () If an entity (the seller-lessee) transfers an asset to another entity (the buyer-lessor) and then leases it back from the buyer, the seller-lessee must assess whether the transfer should be accounted for as a sale.(6) of the transfer is not a sale then the seller-lessee continues to recognise the transferred asset and will recognise a financial liability equal to the transfer proceeds. (ii) If the transfer does qualify as a sale then the seller lessee must measure the right-of-use asset as the proportion of the previous carrying amount that relates to the rights retained O a. Oonly Ob. O.dibandi) OC (only Od and(ii)only 20. Which of the following is/are TRUE about IAS 12 Income Taxes? (Current tax (the amount of tax payable/recoverable in respect of the taxable profit/loss for a period). Deferred tax (an accounting adjustment aimed to match the tax effects of transactions to the relevant accounting period). (h) Any under or over-provision from the prior year is dealt with in the current years tax charge O a 0.() and ) ob: 0) only Oc and only Od 0) only 21. Which of the following are TRUE about deferred tax? Deferred tax is the estimated future tax consequences of transactions and events recognised in the financial statements of the current and previous periods. (b) A temporary difference arises when an expense is allowed for both tax and accounting purposes, but within different accounting periods. (ii) Permanent differences are one-off differences between accounting and taxable profits caused by certain items not being taxable/allowable differences which only impact on the tax computation of one period (iv) Deferred tax is calculated using the liability method, in which deferred tax is calculated by reference to the tax base of an asset or liability compared to its carrying amount. O a O. (). Chil) and (iv) O b. ) and (ii) only Oc() and (16) only O d. (i), (iii) and (iv) only On 1 April 2018 Bumi acquires telephones for its sales force under a two-year lease agreement. The terms of the lease require an initial payment of $2,000, followed by two payments of $8,000 each on 31 March 2019 and 31 March 2020. What is the annual lease rental expense? O a $10,000 b. $8,000 Oc$9,000 od $2,000 Wetherby purchased a machine on 1 July 20x7 for $500,000. It is being depreciated on a straight line basis over its expected life of ten years. Residual value is estimated at $20,000. On 1 January 20x8, following a change in legislation, Wetherby fitted a safety guard to the machine. The safety guard cost $25,000 and has a useful life of five years with no residual value. What amount will be charged to profit or loss for the year ended 31 March 20x8 in respect of depreciation on this machine? Select one: a. $36,200 Ob $36,000 OC $37,250 O d. $38,250 Clear my choice