On 1 January 20X2 an entity began work on constructing a factory. It purchased the land for $14 million, built the factory buildings for $11 million and installed plant and equipment for $7 million. The project was completed on 31 December 20X3 when the factory was deemed ready to use, however, the factory did not start operations until 1 June 20X4.
To fund the project the entity borrowed $25 million on 1 January 20X2, with interest at 10% per year.
The loan was repaid in full on 31 December 20X4.
Calculate the total amount to be added to the cost of property, plant and equipment in respect of the above development.
Give your answer to the nearest $ million.

KL has S90.000 of plant and machinery which was acquired on 1 June 20X4. Tax depreciation rates on plant and machinery are 20% reducing balance. All plant and machinery was sold for 560,000 on 1 June 20X6 Calculate the tax balancing allowance or charge on disposal tor the year ended 31 May 20X7 and state the effect on the taxable profit.

• A. A balancing charge of $2,400 increases taxable profit.
• B. A balancing charge of $2,400 reduces taxable profit.
• C. A balancing allowance of $2,400 increases taxable profit.
• D. A balancing allowance of $2,400 reduces taxable profit.

In accordance with the Conceptual Framework for Financial Reporting, which of the following describes the historical cost measurement basis for an asset?

• A. The amount that would be received on the sale of the asset.
• B. The present value of future cash flows generated from the asset.
• C. The cost to acquire an equivalent asset at the measurement date.
• D. The amount paid when the asset was purchased.

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 $.

An entity's policy is to finance the investment in working capital using short-term financing to fund all of its investment in fluctuating net current assets as well as some of its investment in permanent net current assets.
What is this working capital financing policy known as?

• A. Short term
• B. Conservative
• C. Aggressive
• D. Moderate