Kindly help me answer the questions as soon as possible.

1. Petros Limited is a subsidiary of Butros Limited. When Butros acquired its 60% interest the retained earnings of Petros Limited were $20 000. At the beginning of the current period Petros Limited's retained earnings had increased to $50 000. Petros earned profit of $10 000 during the current period. The share of the non-controlling interest in the equity of Petros Limited at reporting date is: Answer $24 000 $32 000 $36 000 $48 000. 2. Dragon Limited is an entity listed in Hong Kong. Dragon Limited holds a 100% investment in Aussie Pty Ltd, an Australian based company, who in turn holds a 90% interest in Bondi Pty Ltd. Aussie Pty Ltd and the Aussie group (comprising Aussie and Bondi) are both nonreporting entities. Which of the following statements is correct? Answer Aussie Pty Ltd will be required to prepare consolidated financial statements as the ultimate Australian parent. Aussie Pty Ltd will not be required to prepare consolidated financial statements as they are a non-reporting entity. Aussie Pty Ltd will be required to prepare consolidated financial statements only if directed to do so by ASIC. Aussie Pty Ltd will not be required to prepare consolidated financial statements as Dragon is a listed foreign entity. 3. A Ltd sold an item of plant to B Ltd on 1 January 20X7 for $25 000. The asset had cost A Ltd $30 000 when acquired on 1 January 20X5. At that time the useful life of the plant was assessed at 6 years. The adjustment necessary on consolidation to reflect the tax effect of the depreciation adjustment for the year ended 30 June 20X7 will result in an increase in: Answer deferred tax assets deferred tax liabilities income tax expense current tax liability. 4. A parent entity group sold a depreciable non-current asset to a subsidiary entity for $2800. The asset originally cost $3000 and at the date of sale accumulated depreciation was $500. The amount of the unrealised gain on sale to be eliminated is: Answer $2800 $500 $300 $200 5. A non-controlling interest is entitled to a share of which of the following items? I Equity of the group entity at acquisition date II Current period profit or loss of the subsidiary entity III Changes in equity of the subsidiary since acquisition date and the beginning of the financial period IV Equity of the subsidiary at acquisition date Answer I, II and III I and II only II, III and IV only III only. 6. Jiminez Limited acquired 80% of the share capital and reserves of Mustang Limited for $180 000. Share capital was $100 000 and reserves amounted to $50 000. All assets and liabilities were recorded at fair value except buildings which was recorded at $10 000 below fair value. The fair value of the NCI at the date of Jiminez's acquisition was $35 000 and the full goodwill method is adopted by the group. If the company tax rate was 30%, the goodwill recorded in relation to this business combination amounts to: Answer $3 600 $23 000 $54 400 $58 000. 7. A Ltd holds a 60% interest in B Ltd. B Ltd sells inventory to A Ltd during the year for $10 000. The inventory originally cost $7 000. At the end of the year 50% of the inventory is still on hand. The tax rate is 30%. The NCI adjustment required in relation to this transaction is a debit of: Answer NIL $420 $630 $1 050. 8. In May 20X7, a parent entity sold inventory to a subsidiary entity for $30 000. The inventory had previously cost the parent entity $24 000. The entire inventory is still held by the subsidiary at reporting date, 30 June 20X7. Ignoring tax effects, the adjustment entry in the consolidation worksheet at reporting date is: Answer Cash Dr 24,000 Sales revenue Cr 24,000 Cost of Sales Dr 24,000 Inventory Cr 24,000 Sales revenue Dr 24,000 Cash Cr 24,000 Inventory Dr 24,000 Cost of Sales Cr 24,000 Sales revenue Dr 30,000 Cost of Sales Cr 6,000 Inventory Cr 24,000 Sales revenue Dr 30,000 Cost of Sales Cr 24,000 Inventory Cr 6,000 9. According to AASB 10 Consolidated Financial Statements, 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 govern the operating policies of an entity so as to obtain benefits. IV. Ownership of more than 50% of the voting power in the subsidiary. Answer I, II and III only I and IV only II and IV only IV only. 10. On 1 July 20X6, P Limited acquired all the issued shares of S Limited for $50 000 when the equity of S Limited consisted of: Share Capital $35 000, Retained Earnings $15 000. The preacquisition entry at 1 July 20X6 is: Answer Shares in S Limited Dr 50,000 Opening Retained earnings Cr 15,000 Share capital Cr 35,000 Opening Retained earnings Dr 15,000 Share capital Dr 35,000 Shares in S Limited Cr 50,000 Opening Retained earnings Dr 35,000 Share capital Dr 15,000 Shares in S Limited Cr 50,000 Goodwill Dr 15,000 Share capital Dr 35,000 Shares in S Limited Cr 50,000 11. A Ltd holds a 60% interest in B Ltd. On 1 July 20X8 B Ltd transferred a depreciable noncurrent asset to A Ltd at a profit of $5 000. The remaining useful life of the asset at the date of transfer was 4 years and the tax rate is 30%. The impact of the above on the NCI share of profit for the year ended 30 June 20X9 is: Answer an increase of $2 625 a decrease of $2 625 an increase of $1 050 a decrease of $1 050. 12. Lu Nan Limited acquired 80% of the share capital and reserves of Hui Limited for $20 000. Share capital was $10 000 and reserves amounted to $6 000. All assets and liabilities were recorded at fair value except plant which was recorded at $1 000 below fair value. The company tax rate was 30%. The partial goodwill method is adopted by the group. The amount of goodwill acquired by Lu Nan Limited in this business combination was: Answer $4 000 $6 640 $7 200 $13 360. 13. The process of aggregating individual sets of financial statements to produce consolidated financial statements requires: Answer that no adjustments be entered into the individual ledger accounts of entities in the group balance sheet date adjusting journal entries to be recorded in the ledger accounts of the subsidiaries accruals of expenses and revenue, directly into the retained earnings ledger account of the parent entity balance sheet date adjusting entries directly into the ledger accounts of the parent entity only 14. During the year ended 30 June 20X7, a parent entity rents a warehouse from a subsidiary entity for $100 000. The company tax rate is 30%. The consolidation adjustment entry needed at reporting date is: Answer Rent revenue Dr 100,000 Rent expense Cr 100,000 Rent revenue Dr 100,000 Rent expense Cr 100,000 Income tax expense Dr 30,000 Deferred tax liability Cr 30,000 Rent revenue Dr 100,000 Rent expense Cr 100,000 Deferred tax asset Dr 30,000 Income tax expense Cr 30,000 Rent expense Dr 100,000 Rent revenue Cr 100,000 15. All parent entities are required to present consolidated statements unless the following conditions apply to them: I The parent is a wholly owned subsidiary. II The parent is a partly owned subsidiary and its owners do not object to the nonpresentation of consolidated financial statements. III The parent's debt or equity securities are traded in a public market. IV The parent is not in the process of applying to issue any securities in a public market. Answer I and II only I, II and III only I, II and IV only I, II, III and IV. 16. When preparing consolidated financial statements, adjustments for pre-acquisition equity and inter-entity transactions are recorded: Answer in the accounting records of the parent entity in the accounting records of the subsidiary on a consolidation worksheet in the accounting records of the reporting entity. 17. Which of the following statements is correct? Answer The legal acquirer under AASB 3 and the accounting acquirer under AASB 10 do not have to be the same entity. The entity identified under AASB 10 as the parent will be the acquirer under AASB 3. The legal acquirer is determined under AASB 3 as the entity that issues the equity instruments. The accounting acquirer is the entity that becomes the controlling entity. 18. On 1 July 20X6 Possum acquired a 100% interest in Echidna. At that time Echidna had goodwill of $5 000 recorded in its statement of financial position as a result of a previous business combination. The total goodwill arising on Possum's acquisition of Echidna was $12,000. The goodwill recognised on consolidation as a result of Possum's acquisition of Echidna is: Answer nil $5 000 $7 000 $12 000 19. Company X acquired Company Y when the carrying value of Company Y's plant was $50 000. The fair value of the plant on acquisition date was $65 000. The company tax rate was 30%. How much is the amount of the business combination valuation reserve that must be recognised? Answer $3 500 $10 500 $15 000 $65 000 20. The key principle relating to the disclosure of information about business combinations is to disclose information that: Answer enables users to evaluate the nature and financial effect of business combinations that occurred during the period enables the preparation of the consolidated financial statements in the most cost-effective manner does not give an advantage to the competitors of a business group provides users with information about the parent entity only. 21. Xana Limited paid $110 000 for 60% of Yama Limited. At the date of acquisition Yama Limited had share capital of $100 000 and retained earnings of $50 000 and all of Yama Limited's assets and liabilities were recorded at fair value. The fair value of identifiable net assets acquired by Xana Limited amounted to: Answer $60 000 $90 000 $110 000 $150 000. 22. A subsidiary entity sold inventory to its parent entity at a profit of $8 000. The goods had originally cost the subsidiary $20 000. At the end of the year all the inventory was still on hand. The adjustment entry to deal with this transaction on consolidation would include the following line item: Answer CR Cost of sales $28 000 CR Cost of sales $20 000 CR Cost of sales $12 000 CR Cost of sales $8 000. 23. Truong Limited acquired 60% of the shares of Quang Limited through the Australian Securities Exchange. The share acquisition cost Truong Limited $500 000. As a result of the share acquisition, Truong Limited gained control over Quang Limited. In its accounting records, Truong will recognise: Answer an investment at a cost of $500 000 an investment with a market value of $300 000 an increase in share capital of $500 000 an increase in share capital of $300 000. 24. Nelson Limited has two subsidiary entities, Poggi Limited and Holly Limited. Nelson Limited owns 100% of the shares in both entities. Details of issued share capital are: Nelson Limited $100 000, Poggi Limited $30 000 and Holly Limited $15 000. The worksheet adjustment entry made in order to determine the amount of consolidated share capital is: Answer DR Share capital $145 000 CR Shares in subsidiaries $145 000 DR Share capital $100 000 CR Shares in subsidiaries $100 000 DR Share capital $45 000 CR Shares in Poggi Limited $30 000 CR Shares in Holly Limited $15 000 DR Share capital $145 000 CR Shares in Nelson Limited $100 000 CR Shares in Poggi Limited $30 000 CR Shares in Holly Limited $15 000 25. Jiminez Limited acquired 80% of the share capital and reserves of Mustang Limited for $180 000. Share capital was $100 000 and reserves amounted to $50 000. All assets and liabilities were recorded at fair value except buildings which was recorded at $10 000 below fair value. If the company tax rate was 30%, and the partial goodwill method was adopted, the NCI share of equity at the date of acquisition was: Answer $30 000 $31 400 $32 000 $36 000. 26. On 1 January 20X2 A Ltd acquired all the issued shares in B Ltd. At that date the inventory of B Ltd had a carrying amount of $5 000 less than its fair value. The inventory was all sold by 30 June 20X4. At 30 June 20X5 the consolidation adjustment against inventory in relation to the transaction will be: Answer a debit of $5 000 a credit of $5 000 a debit of $3 500 nothing 27. When an entity sells a non-current asset at a profit to another entity within the same group the following adjustment is necessary on consolidation: DR Asset CR CR DR DR Cash Asset Cash Gain on sale CR DR Asset Asset CR Gain on sale. 28. AASB 10 Consolidated Financial Statements, defines a 'parent' and a 'subsidiary' as: Parent: An entity which owns more than 50% of the voting shares of another entity Subsidiary: An entity in which another entity owns more than 50% of the voting shares. Parent: An entity which owns more than 20% of the voting shares of another entity Subsidiary: An entity which is owned partly by another entity. subsidiaries Parent: An entity that has one or more Subsidiary: An entity which is controlled by a parent entity Parent: An entity that controls another entity Subsidiary: An entity which is controlled by another entity 29. A subsidiary entity sold inventory to its parent entity at a profit of $4 000. The goods had originally cost the subsidiary $10 000. At the end of the year all the inventory was still on hand. The adjustment entry to deal with this transaction on consolidation would include the following line item: CR Inventory $4 000 CR Inventory $6 000 CR Inventory $10 000 CR Inventory $14 000 30. JoJo Ltd provided an advance of $500 000 to its subsidiary BoBo Ltd. Interest of $50 000 was charged during the year ended 30 June 20X8. On consolidation the following adjustment is needed at 30 June 20X8 in relation to the interest charged: no adjustment needed; DR Interest revenue CR DR DR Interest expense Interest expense CR $50 000 $50 000 Interest revenue Retained earnings CR $50 000 Cash $50 000 $50 000 $50 000 31. A Limited acquired B Limited for $110 000. At acquisition date the fair value of the B Limited's Land asset was $40 000 and the book value was $30 000. If the company tax rate is 30%, which of the following is the appropriate adjustment to recognise the tax effect of the business combination revaluation of land? DR Deferred tax liability $3 000 CR Deferred tax liability $3 000 DR CR Deferred tax asset $3 000 Deferred tax liability $3 000 32. A subsidiary entity sold inventory to a parent entity for $30 000. The inventory had previously cost the subsidiary entity $24 000. By reporting date the parent entity had sold 75% of the inventory to a party outside the group. The company tax rate is 30%. The adjustment entry in the consolidation worksheet at reporting date is: Sales revenue Dr 30,000 Cost of Sales Cr 6,000 Inventory Cr 24,000 Deferred tax asset Dr 1,800 Income tax expense Cr 1,800 Sales revenue Dr 30,000 Cost of Sales Cr 28,500 Inventory Cr 1,500 Deferred tax asset Dr 450 Income tax expense Cr 450 Sales revenue Dr 22,500 Cost of Sales Cr 18,000 Inventory Cr 4,500 Deferred tax asset Dr 1,350 Income tax expense Cr 1,350 Sales revenue Dr 7,500 Cost of Sales Cr 6,000 Inventory Cr 1,500 Deferred tax asset Dr 450 Income tax expense Cr 450 33. AASB 10 Consolidated Financial Statements, requires that intragroup transactions be: eliminated on consolidation to the extent of the parent's interest in the subsidiary. adjusted for in the books of the parent and subsidiary to the extent of the parent's interest in the subsidiary adjusted for in full in the books of the parent and subsidiary. eliminated in full on consolidation 34. Eeny Limited has two subsidiary entities, Meeny Limited and Miney Limited. Eeny Limited owns 100% of the shares in both entities. Eeny Limited has $100,000 of issued share capital, Meeny Limited $30,000 and Miney Llimited $15,000. The consolidated share capital amount of the Eeny Meeny Miney group is: $45 000 $55 000 $100 000 $145 000. 35. Non-controlling interest is classified, according to AASB 10 Consolidated Financial Statements, as: part of the equity of the parent entity part of the equity of the group a liability of the parent entity a liability of the group. 36. Which of the following is correct in relation to rights in the context of control? The rights must be protective rights The rights must arise from a legal contract The rights may be administrative. The rights must be substantive rights 37. According to AASB 12 Disclosure of Interests in Other Parties, parent entities are required to disclose: I Summarised financial information about each subsidiary II A list of significant investments in subsidiaries. III If the subsidiary is not wholly owned, the names of all other members. IV The country of incorporation of subsidiaries. I, II and IV only II, III and IV only I and IV only I, II, III and IV. 38. Two entities A Limited and B Limited together form a third entity, C Limited. C Limited acquires A Limited and B Limited. In this situation, AASB 3 Business Combinations, adjudges that: A Limited and B Limited cease to exist and C Limited is the acquirer The combined A Limited and B Limited, is the acquirer of C Limited C Limited is considered to be the acquirer C Limited is not to be considered to be the acquirer 39. If the cost of a business combination is greater than the acquired interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree: a gain on bargain purchase results goodwill has been purchased and must be recognised the difference is treated as a special equity reserve in the acquirer's accounting records the difference is treated as a loss and immediately charged to profit or loss of the period in which the business combination occurred