3 According to the Conceptual Framework, existing and potential investors, lenders and other creditors of a reporting entity need information in general purpose financial reports to make assessments about: t I. expected returns from the entity in the form of dividends, principal and interest payments or market price increases. II. the amount, timing and uncertainty of future net cash inflows of the entity. III. management's stewardship of the entity's economic resources. IV. the corporate social responsibility performance of the entity. O A. I., II., III. and IV OB. I. and II. only. O C. I., II. and III. only OD. I. only 9 The equity of Suresh Ltd on 30 June 2019 was as follows: ut Share capital (issued at $4, fully paid) Asset revaluation surplus 200 000 700 000 Suresh Ltd decided to offer all the shares to their management as options, at an issue price of $0.65 per option. Each option allows the holder to subscribe for one ordinary share at an exercise price of $2.80 per share on or before 1 July 2020. All the options were purchased by management. By 1 July 2020, 80% of the options issued were exercised and shares were issued. The remaining options lapsed. Which of the following is a correct entry? OA. cash $ 112,500.00 share options $ 112,500.00 . cash $ 112,000.00 B. cash $ 112,000.00 share options $ 112,000.00 O c. cash $ 32,500.00 share options $ 32,500.00 D. cash 42,500.00 share options $ 42,500.00 Recently, $16 000 cash was stolen from Super Fresh Ltd night safe. Fisher needs to account for this event, by reference to relevant Conceptual Framework definitions. Which of the following is not true? O A. This results in an expense. O B. The theft involves an economic resource, thus record an asset O c. The event has resulted in a decrease in assets during the period, as cash (economic resource) has decreased. O D. The theft has resulted in a decrease in equity, as assets have decreased and liabilities have not changed. On 1 January 2015, Russi Ltd constructed an electricity plant. The cost of the building and associated technology was $1,000,000. The license to operate and architects' fees amounted to $500,000. The dismantling cost was expected to be $800,000 at the end of plant's 10-year useful life. The discount rate was 10%. The residual value is expected to be $8,435. The plant is expected to generate benefits evenly throughout the years. At the end of 2018, it sells the plant for $1,000,000 cash. What is the carrying amount of the plant at the end of 2018? O A. $1,088, 434 OB. $1,079, 434 OC. $2,099, 435 OD. $1,079, 435 The equity of Suresh Ltd on 30 June 2019 was as follows: Share capital (issued at $4, fully paid) Asset revaluation surplus 200 000 700 000 Suresh Ltd decided to offer all the shares to their management as options, at an issue price of $0.65 per option. Each option allows the holder to subscribe for one ordinary share at an exercise price of $2.80 per share on or before 1 July 2020. All the options were purchased by management. By 1 July 2020, 80% of the options issued were exercised and shares were issued. The remaining options lapsed. Which of the following entries could be correct? O A. Dr Share capital by $26, 000 O B. Cr Lapsed options reserve by $6,500 O c. Dr Lapsed options reserve by $6,500 OD. Cr Share options by $32, 500 At 1 July 2018, Rup Ltd acquired the following non-current assets: Equipment Vehicles $100 000 $80 000 They are in different classes of non-current assets and are to be measured at fair value. The expected useful lives of vehicles and equipment are 5 years and 10 years, respectively. At 30 June 2019, the fair values of both assets were assessed. The equipment had a fair value of $82 000, and the vehicles, $70 000. The remaining useful lives were assessed to be 8 years for equipment and 7 years for vehicles. As a result of this, Equipment recorded a loss on revaluation of $8000 and vehicle recorded a revaluation increment of $6000. At 30 June 2020, the fair value of equipment was assessed to be $81 750 and the fair value of vehicles was $55 000. Chandra is preparing the journal entries for 30 June 2020. What is the correct value for the two missing figures (i.e. gain on revaluation and revaluation surplus) in the entries below? Equipment $ 10,000.00 gain on revaluation $82 000, and the vehicles, $70 000. The remaining useful lives were assessed to be 8 years for equipment and 7 years for vehicles. As a result of this, Equipment recorded a loss on revaluation of $8000 and vehicle recorded a revaluation increment of $6000. At 30 June 2020, the fair value of equipment was assessed to be $81 750 and the fair value of vehicles was $55 000. Chandra is preparing the journal entries for 30 June 2020. What is the correct value for the two missing figures (i.e. gain on revaluation and revaluation surplus) in the entries below? Equipment $ 10,000.00 gain on revaluation revaluation surplus O A. $8,000 and $2,000, respectively OB. $6,000 and $4, 000, respectively O c. $4,000 and $6, 000, respectively OD. $2,000 and $8,000, respectively On 1 January 2015, Russi Ltd constructed an electricity plant. The cost of the building and associated technology was $1,000,000. The license to operate and architects' fees amounted to $500,000. The dismantling cost was expected to be $800,000 at the end of plant's 10-year useful life. The discount rate was 10%. The residual value is expected to be $8,435. The plant is expected to generate benefits evenly throughout the years. At the end of 2018, it sells the plant for $1,000,000 cash. What is the amount of loss on sale? O A. $90,000 B. $98, 435 O c. $88, 435 OD. $95, 000 Treehouse Bouquets rents a small shop located in the outskirts of Suva. In accordance with the Conceptual Framework, Treehouse Bouquets should recognize the monthly payment for the shop rental as: O A. a decrease in assets and an increase in equity. O B. an increase in income and a decrease in liabilities. O c. a decrease in assets and an increase in expense OD. a decrease in assets and a decrease in income