Question
First Question Rowley Limited owns 61% of the share capital of Alvina Limited. Alvina Limited paid a dividend of $70 000 during the financial year
First Question
Rowley Limited owns 61% of the share capital of Alvina Limited. Alvina Limited paid a dividend of $70 000 during the financial year ended 30 June 2019.The adjustment entries in the consolidation worksheet at 30 June 2019 of Rowley Group for the dividend include which of the following?
A. Dr. Dividend paid $70 000
Cr. Cash$70 000
B. Dr. Dividend income $42 700
Dr. NCI$27 300
Cr. Dividend declared$70 000
Dr. Dividend payable $42 700
Cr. Dividend receivable $42 700
C. Dr. Dividend income $27 300
Dr. NCI$42 700
Cr. Dividend paid$70 000
D. Dr. Dividend income $42 700
Dr. NCI$27 300
Cr. Dividend paid$70 000
Second Question
Daryl Limited acquired 72% of the share capital and reserves of Hannah Limited for $200 000. The equity of Hannah Limited at the acquisition date consisted of share capital of $120 000 and reserves of $80 000. All assets and liabilities were recorded at fair value except a plant which were recorded at $20 000 below its fair value.
The company tax rate was 30% and the fair value of the non-controlling interest is estimated to be $60 000. There was no goodwill recorded by the subsidiary at the acquisition date.
The amount of pre-acquisition equity attributable to the non-controlling interest [NCI Step 1] based onfull goodwillandpartial goodwillmethods to measure NCI shall be:
A. If using full goodwill method, NCI's share of pre-acquistion equity = $59 920.
If using partial goodwill method, NCI's share of pre-acquistion equity = $60 000.
B. NCI's share of pre-acquistion equity = $59 920 for both measurement using full goodwill or partial goodwill method.
C. If using full goodwill method, NCI's share of pre-acquistion equity = $60 000.
If using partial goodwill method, NCI's share of pre-acquisition equity = $59 920.
D. NCI's share of pre-acquistion equity = $60 000 for both measurement using full goodwill or partial goodwill method.
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