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Ruby Co owns 30% of Emerald Co and exercises significant influence over it. Emerald Co sold goods to Ruby Co for $160,000. Emerald Co applies a one-third mark-up on cost. Ruby Co still had 25% of these goods in inventory at the year end.What amount should be deducted from consolidated retained earnings in respect of this transaction?

A. $3,000
B. $2,900
C. $2,800
D. $3,100

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Steeplechase Co sold a machine to a Greek company which it agreed to invoice in €. The sale was made on 1 October 20X6 for €250,000. €125,000 was received on 1 November 20X6 and the balance is due on 1 January 20X7. The exchange rate moved as follows: 1 October 20X6 - €0.91 to $1 1 November 20X6-€0.95 to $1 31 December 20X6 - €0.85 to $1 At what amount will the receivable be shown in the financial statements at 31 December 20X6?

A. $147,059
B. $137,363
C. $131,579
D. $130,586

IAS 21 sets out how entities that carry out transactions in a foreign currency should measure the results of these transactions at the year end.Which exchange rate should non-monetary items carried at historical cost be measured?

A. Closing rate
B. Average rate
C. Rate at date of transaction
D. Rate at beginning of the year

Miston Co buys goods priced at €50,000 from a Dutch company on 1 November 20X8. The invoice is due for settlement in two equal instalments on 1 December 20X8 and 1 January 20X9. The exchange rate moved as follows: 1 November 20X8 -1.63 to $1 1 December 20X8 -1.61 to $1 31 December 20X8 -1.64 to $1 What will be the net exchange gain or loss to be reported in the financial statements of Miston Co at 31 December 20X8?

A. $98 loss
B. $98 gain
C. $100 loss
D. $100 gain

Which of the following would be treated under IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors as a change of accounting policy?

A change in valuation of inventory from a weighted average to a FIFO basis
B. A change of depreciation method from straight line to reducing balance
C. Adoption of the revaluation model for non-current assets previously held at cost
D. Capitalisation of borrowing costs which have arisen for the first time

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