10. a b 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. I. II and III only I and IV only II and IV only IV only 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? Cr Inventories $12 000 Cr Inventories $53 000 Cr Inventories $41 000 Cr Inventories $29 000 d 11. a b d 12. 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: $800. $7200 $3200 $24 000. a b d