16. Determination of the consolidated sales is affected by

a. The total amount of both upstream and downstream sale of merchandise inventory

b. The total amount of upstream sale of merchandise inventory only

c. The gain arising from an upstream sale of an equipment

d. The loss arising from both upstream and downstream sale of land

17. Unrealized profit on ending inventory is relevant in determining the consolidated amount of inventories, hence, the amount of unrealized profit on ending inventory is credited in the working paper

a. True

b. False

18. For the purpose of consolidation, what is the treatment of intercompany sales in determining the consolidated sales?

a. Eliminated in the books of the buying entity since parent and subsidiary are considered a single economic entity

b. Eliminated in the working paper by crediting sales at the amount equal to the total intercompany sale of inventory between the parent and subsidiary for the year

c. Eliminated in the working paper by debiting sales at the amount equal to the total intercompany sale of inventory between the parent and subsidiary for the year

d. Shall be eliminated in the books of the parent if the transaction is a downstream sale

19. Under IAS 27 fair value model, which is correct?

a. At the end of each reporting period, the amount of investment in subsidiary should always be the same as the amount recognize in the date of acquisition

b. Changes in fair value of the shares of subsidiary held by the parent are disclosed only in the relevant notes to financial statement

c. The recording of dividends received by the parent from the subsidiary includes a credit to dividend income

d. Fair value model shall be utilized only by the parent in a business combination achieve in stages

20. Under the equity method of accounting for investment in subsidiary account of IAS 27, when the subsidiary declares a dividend

a. The investment account in the parent's book is debited representing increase due to dividends expected to be received

b. The investment account in the parent's book is credited with a corresponding debit on dividend receivable

c. Only a memo entry shall be prepared in the books of the parent

d. There is a decrease in the total assets in the separate books of the parent