Veronica plc prepares its financial statements to 31 December. During 2012 Veronica plc made sales of $850,000 and incurred costs of $610,500. At the beginning of 2012 customers owed
$125,500 and at the end of the year they owed $135,400. At the beginning of 2012 Veronica plc owed $45,500 to its suppliers and employees and at the end of the year it owed $35,700.
During 2012 Veronica plc received interest of $14,500 and paid interest of $500.
In accordance with IAS 7 Statement of Cash Flows, what was Veronica plc's net cash from operating activities under the direct method for the year ended 31 December 2012?

• A. $233,800
• B. $219,300
• C. $258,700
• D. $219,800

Measurement of the elements of financial position is the process of determining the monetary amounts at which the elements of the financial statements are to berecognizedand carried in the statement of financial position and statement of comprehensive income. There are number of basis of measurement that companies use in preparing financial statements.
Which of the following best explains the 'current cost accounting'?

• A. The amount of cash or cash equivalents that could currently be obtained by selling an asset in an orderly disposal.
• B. The amount of cash or cash equivalents that was paid if an equivalent asset was acquired currently.
• C. Assets are recorded at the amount of cash or cash equivalents paid or the fair value of the consideration given to acquire them at the time of their acquisition.
• D. The amount of cash or cash equivalents that would have to be paid if an equivalent asset was acquired currently.

On 1 January 2008 Sudden Ltd purchased a freehold office block for $2.5 million. At the date of acquisition the useful life was estimated to be 50 years and the residual value $250,000. The company policy is to depreciate freehold property on the straight-line basis. On 31 December 2013 the residual value of the offices was estimated at $450,000 due to an increase in commercial property prices. The estimated useful life of the property remained unchanged.
What amount will berecognizedin profit or loss as depreciation in respect of the freehold property in the year to 31 December 2013?

• A. $45,000
• B. $45,555
• C. $40,556
• D. $41,000

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) 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 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.
• D. (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.

Roland Ltd has loan of 6% redeemable preference shares in issue. They are redeemable on 31 December 2012. In accordance with IAS 32 Financial Instruments: Presentation, where are these to be disclosed in the statement of financial position as at 31 December 2012?

• A. Non-current assets
• B. Current liabilities
• C. Equity
• D. Non-current liabilities