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

Julie plc has one associated company, Andrew Ltd, in which Julie plc holds 40% of the issued 100,000 $1 ordinary shares. The financial controller of Julie 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, Julie plc had made a cash advance of $100,000 to Andrew Ltd. During the current accounting period, Andrew Ltd repaid $30,000 of this cash advance.
(2)
During the current accounting period, Andrew Ltd sold an item of property, plant and machinery at its carrying amount for $20,000 cash.
(3)
During the current accounting period, Andrew 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 Julie plc's consolidated statement of cash flows for the current accounting period?

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

Waterloo plc acquired a freehold building for cash, financed in full by issuing 166,000 $1 ordinary shares at a premium of $2 per share.
In its statement of cash flows prepared in accordance with IAS 7 Statement of Cash Flows this transaction should be stated as:

• A.Inflow $498,000, outflow $498,000
• B.Inflow $498,000, outflow nil
• C.Inflow nil, outflow nil
• D.Inflow nil, outflow $498,000

On 1 January 2012, Viceroy Co entered into a finance lease agreement to obtain a machine which would have cost $166,000 if it had been purchased outright. The machine has a useful life of five years, and the lease period is six years. At the end of the lease period, the machine will be returned to thelesser. As well as requiring a final payment, the terms of the lease are:
Initial rental$8,000
Monthly rentals, payable in arrears60 x $3,200
Interest rate implicit in lease8% per annum
Viceroy has a 31 December year end, and provides for depreciation on machinery on the straight-line basis.
How much should be charged in the statement of profit or loss for the year to 31 December 2012 as a result of the lease agreement?

• A.$46,480
• B.$40,307
• C.$40,947
• D.$45,840

According to the IASB's Conceptual Framework for Financial Reporting, which one of the following statements represents the underlying assumption relating to financial statements?

• A.Users are assumed to have sufficient knowledge to be able to understand the financial statements
• B.The accounting policies used have been disclosed
• C.The accounts have been prepared on an accrual basis
• D.The business is expected to continue in operation for the foreseeable future