1. ATS workers went on strike for an indefinite period commencing on 5 August 2019. The strike was expected to cause adverse financial conditions for the company. The financial statements for the year ended 30 June 2019 were expected to be finalized by 7 August 2019. The appropriate treatment regarding this event is:

a disclosure as a note to the financial statements, as it is a non-adjusting event.

b disclosure as a note to the financial statements, as it is an adjusting event.

c to adjust the financial statements, as it is a non-adjusting event.

d to adjust the financial statements, as it is an adjusting event.

2. Just before the finalization of the financial statements for the year ended 30 June 2020, a company experienced a number of material events, including:

I on 10 July 2020 the directors decided to close a division of the company at an estimated cost of $2,000,000.

II on 10 August 2020 a court decision found the company liable to pay damages of $600,000 to a major customer who had commenced legal action in April 2018.

III an independent valuation of property conducted on 20 July 2020 revealed that the directors valuation included in the 30 June 2020 financial statements was overstated by $700,000. In respect of the events listed above, it will be necessary to adjust the financial statements, by way of general journal entries, for:

a I, II and III.

b II only, and make a note disclosure for I and III.

c III only, and make a note disclosure for I and II.

d II and III only, and make a note disclosure for I.

3. According to IFRS 10 Consolidated Financial Statements, which of the following factors indicate the existence of control? I. Possessing existing rights that give the current ability to direct the relevant activities. II. Shared power in the governance of financial and operating policies of another entity so as to obtain benefits. III. The power to have significant influence over the operating policies of an entity so as to obtain benefits. IV. Ownership of more than 50% of the voting rights in the subsidiary.

a I, II and III only

b I and IV only

c II and IV only

d IV only

4. A subsidiary sold a quantity of inventories to its parent entity at a before-tax profit of $12 000. The original cost of the inventories to the subsidiary was $41 000. At the end of the year all of the inventories were still on hand. The consolidation adjustment entry to eliminate this transaction will include which of the following line items?

a Cr Inventories $12 000

b Cr Inventories $53 000

c Cr Inventories $41 000

d Cr Inventories $29 000

5. Suva Limited sold inventories to its parent entity, Lautoka Ltd, at a before-tax profit of $8 000. The inventories originally cost Suva Limited $32 000. At balance date, Lautoka Limited had sold 90% of the inventory to an external party. The consolidation adjustment entry (excluding tax effects) will eliminate unrealised profit amounting to:

a $800.

b $7200.

c $3200.

d $24 000.

6. A parent entity sold a depreciable non-current asset to a subsidiary entity for $5 600. The asset originally cost $6 000 and at the date of sale accumulated depreciation was $1 000. The amount of the unrealised gain on sale to be eliminated is:

a $5 600.

b $1 000.

c $600.

d $400

7. If an Australian company enters a forward exchange contract to buy US$15 000, then which of the following applies?

a The companys contractual obligation (at the forward rate) and contractual right (at the spot rate) are settled on a net basis.

b The company has a contractual obligation to deliver foreign currency at the settlement date and that obligation is realized at the spot rate.

c The company has a contractual right to receive US$15 000 at the settlement date and that right is an asset fixed in A$ at the forward rate.

d The companys forward contract will act as a hedge against a recognized asset.