1. Tazer, a parent company, acquired Lowdown, an unincorporated entity, for GHS2.8 million. A fair value exercise performed on Lowdown's net assets at the date of purchase showed: GHS'000 Property, plant and equipment 3,000 Identifiable intangible asset 500 Inventory 300 Trade receivables less payables 200 4,000 . How should the purchase of Lowdown be reflected in Tazer's consolidated statement of financial position?

A. Record the net assets at their values shown above and credit profit or loss with GHS1.2 million B. Record the net assets at their values shown above and credit Tazer's consolidated goodwill with GHS1.2 million C. Write off the intangible asset (GHS500,000), record the remaining net assets at their values shown above and credit profit or loss with GHS700,000 D. Record the purchase as a financial asset investment at GHS2.8 million Information relevant to questions

2. Henry acquired 80% of Stephen on 1 July 2018. In the post-acquisition period Henry sold goods to Stephen at a price of GHS12 million. These goods had cost Henry GHS9 million. During the year to 31 March 2019, Stephen had sold GHS10 million (at cost to Stephen) of these goods for GHS15m million. How will this affect group cost of sales in the consolidated statement of profit or loss of Henry for the year ended 31 March 2019?

A. Increase by GHS11.5 million B. Increase by GHS9.6 million C. Decrease by GHS11.5 million D. Decrease by GHS9.6 million 28 On 1 July 2017,

3.Spider acquired 60% of the equity share capital of Fly and on that date made a GHS10 million loan to Fly at a rate of 8% per annum. What will be the effect on group retained earnings at the year end date of 31 December 2017 when this intragroup transaction is cancelled?

A. Group retained earnings will increase by GHS400,000. B. Group retained earnings will be reduced by GHS240,000. C. Group retained earnings will be reduced by GHS160,000. D. There will be no effect on group retained earnings.

4. How should an associate be accounted for in the consolidated statement of profit or loss?

A. The associate's income and expenses are added to those of the group on a line-by-line basis. B. The group share of the associate's income and expenses is added to the group figures on a line-by line basis. C. The group share of the associate's profit after tax is recorded as a one-line entry. D Only dividends received from the associate are recorded in the group statement of profit or loss.

5. An associate is an entity in which an investor has significant influence over the investee. Which TWO of the following indicate the presence of significant influence? I The investor owns 360,000 of the 1,500,000 equity voting shares of the investee. II The investor has representation on the board of directors of the investee. III The investor is able to insist that all of the sales of the investee are made to a subsidiary of the investor. IV The investor controls the votes of a majority of the board members.

A. I and III B. II and IV C. I and II D. III and IV