Question 1

Subsequent to acquisition date the goodwill acquired through a business combination was considered to have been impaired by R5 000. The consolidation worksheet entry to adjust for this event is:

Select one:

A. DR Retained earnings R5 000. since acquisition transactions (expense/loss)at the beginning of the are written off against retained earnings.

B. CR Goodwill R5 000;

C. CR Investment in shares of subsidiary R5 000;

D. CR Accumulated impairment losses R5 000;

Question 2

When Company A acquired Company B the book value of Company 5s Equipment was R100 000. The fair value of the Equipment on acauisition date was R130 000. The company tax rate was 30%. How much is the amount of the business combination valuation reserve?

Select one:

A. R130 000

B. R30 000

C. R21 000 (R130 000-R100 000)= R30 000 revaluation surplus x (100%-70%)

D. R7 000

Question 3

Vesty Limited has two subsidiary entities, Lemon Limited and Juice Limited, Vesty Limited owms 100% of the shares in both entities, Details of issued share capital are Vesty Limited R100 000, Lemon Limited R30 000, Juice Limited R15 000. The consolidated share capital amount of the Vesty Lemon Juice group is

Select one: A R145 000

B.R130 000

C. R100 000

D. R115 000

Question 4

Winter Limited sold goods to its parent entity at a profit of R5 000. The goods had originally cost Winter Limited R20 000 The consolidation adjustment entry to eliminate this transaction would include the following item:

Select one:

A. CR Cost of sales R15 000

B. CR Cost of sales R25 000 (elimination of intragroup sales) cost+ profit = sales (20 000+5000) = R25 000 Revenue

C. CR Cost of sales R5 000

D. CR Cost of sales R20 000.

Question 5

Leader Limited acquired 100% of the share capital of Follower Limited. The Follower had issued share capital of R100 000, The book values of Follower Limited's assets were: Land R50 000, Equipment R60 000. The fair values of these assets were: Land R90 000, Equipment R70 000. The tax rate is 30%. The net revaluation of the assets is

Select one:

A. R160 000

B. R35 000 (40 000+ 10 000)x (100%-30%). revaluation amount is recorded after tax

C. R110 000

D.R100 000

Question 6

Salad Limited has two subsidiary entities, Lettuce Limited and Tomato Limited, Salad Limited owns 100% of the shares in both entities. Details of issued share capital are Salad Limited R200 000, Lettuce Limited R60 000, Tomato Limited R30 000. The worksheet adjustment entry made in order to determine consolidated share capital is (no goodwill nor bargain at purchase):

Select one:

A. DR Share capital R290 000

CR Shares in subsidiaries R290 000

B. DR Share capital R90 000

CR Investment in Lettuce Limited R60 000 CR investment in Tomato Limited R30 000

C. DR Share capital R290 000

CR Shares in Salad Limited R200 000 CR Shares in Lettuce Limited R60 000 CR Shares in Tomato Limited R30 000

D. DR Share capital R200 000

CR Shares in subsidiaries R200 000

Question 7

Benny Limited acquired Penny Limited for R150 000, At acquisition date the fair value of the acquiree's buildings was R70 000 and the book value was R20 000, The company tax rate is 30%. Which of the following is the adjustment to recognise the tax effect of the revaluation on consolidation?

Select one: A. CR Deferred tax liability R35 000; B. DR Deferred tax asset R35 000; C. CR Deferred tax liability R15 000, D. DR Deferred tax asset RI5 000;

Question 8

Exelsior Limited acguired 100% of the shares in Arthur Limited on a cum,div, basis for R100 000, At acquisition date the subsidiary had a declared dividend of R5 000. The pre-acquisition entry must include the following line:

Select one: A. CR Shares in subsidiary R100 000;

B.CR Shares in subsidiary R105 000;

C.CR Shares in subsidiary R5 000,

D.CR Shares in subsidiary R95 000; R100 000-5000= 95 000, the payment of dividend occurred before business combination so it won't form part of business combination payment, Dueting

Question 9

Grood Limited acquired 100% of the share capital of Weak Limited for R100 000 which reflects the fair value of the company's assets, liabilities and contingent liabilities, The cost of the combination was R160 000, At acquisition date Weak Limited had a book carrying amount of R8 000 for Goodwill. The company tax rate is 30%. The unrecorded amount of goodwill that must recognised on the consolidation worksheet is:

Select one:

A. R68 000

B. R52 000

C. R60 000

D. R35 000

Question 10

X Company Limited has equipment with a carrying amount of R10 000 and a tax base of R7 000. The company tax rate is 30%. On consolidation an adjustment is made reducing the carrying amount of the asset to R9 000. The consolidation adjustment entries dealing with this item include:

Select one: A. CR Deferred tax laibility R600.

B. DR Deferred tax liability R600;

C. DR Deferred tax liability R300; (10 000-9000 )= R1000 x 30%

D. CR Deferred tax liability R300;

Question 11

Subsequent to acquisition date the goodwill acquired through a business combination was considered to have been impaired by R5 000. The consolidation worksheet entry to adjust for this event is;

Select one:

A. DR Retained earnings R5 000 since acquisition transactions (expense/loss) at the beginning of the are written off against retained earnings.

B. CR Acumulated impairment losses R5 000;

C. CR Investment in shares of subsidiary R5 000

D. CR Grooduill R5 000;

Question 12

When Company A acquired Company B the book value of Company B's Equipment was R100 000. The fair value of the Equipment on acquisition date was R130 000. The company tax rate was 30%. How much is the amount of the business combination valuation reserve?

Select one: A.R130 000 B. R7 000 C. R30 000 D. R21 000 (R130 000-R100 000)= R30 000 revaluation surplus x (100%-70%)

Question 13

Leader Limited acquired 100% of the share capital of Follower Limited. The Follower had issued share capital of R100 000, The book values of Follower Limited's assets were: Land R50 000, Equipment R60 000. The fair values of these assets were: Land R90 000, Equipment R70 000. The tax rate is 30%. The net revaluation of the assets is Select one: A. R100 000 B. R110 000 C. R160 000 D. R35 000 (40 000+ 10 000)x (1007%-30%). revaluation amount is recorded after tax

Question 14

Excelsior Limited acquired 100% of the shares in Arthur Limited on a cum.div. basis for R100 000. At acquisition date the subsidiary had a declared dividend of R5 000. The pre-acquisition entry must include the following line: Select one A, CR Shares in subsidiary R105 000; B. CR Shares in subsidiary R100 000; cCR Shares in subsidiary R5 000; 4/ 13 R100 000-5000 95 000, the payment of dividend occurred before business combination so it won't form part of business combination payment, D. CR Shares in subsidiary R5 000.

Question 15

Winter Limited sold goods to its parent entity at a profit of R5 000, The goods had originally cost Winter Limited R20 000, The consolidation adjustment entry to eliminate this transaction would include the following item: Select one A, CR Cost of sales R5 000; B.CR Cost of sales R25 000 6/13 (elimination of intragroup sales) cost + profit = sales (20 000+5000)= 25 000 Revenue

C. CR Cost of sales R15 000; D.CR Cost of sales R20 000.

Question 16

Question text Grood Limited acauired 100%. of the share capital of Weak Limited for R100 000 which reflects the fairvalue of the company's assets, liabilities and contingent liabilities, The cost of the combination was R160 000, At acquisition date Weak Limited had a book carrying amount of R8 000 for goodwill, The company tax rate is 30%. The unrecorded amount of goodwill that must recognised on the consolidation worksheet is

Select one: A. R68 000 B. R35 000 C. R52 000 D. R60 000

Question 17

Salad Limited has two subsidiary entities, Lettuce Limited and Tomato Limited. Salad Limited owns 100% of the shares in both entities, Details of issued share capital are Salad Limited R200 000, Lettuce Limited R60 000, Tomato Limited R30 000. The worksheet adjustment entry made in order to determine consolidated share capital is (no goodwill nor bargain at purchase): Select one: A. DR Share capital CR Shares in subsidiaries R290 000 R290 000 B. DR Share capital CR Shares in Salad Limited R290 000 R200 000 CR Shares in Lettuce Limited CR Shares in Tomato Limited R60 000 R 30 000

C. DR Share capital CR Investment in Lettuce Limited R90 000 R60 000 R 30 000 CR investment in Tomato Limited D. DR Share capital CR Shares in subsidiaries R200 000 R200 000

Question 18

Benny Limited acquired Penny Limited for R150 000. At acquisition date the fair value of the acquiree's buildings was R70 000 and the book value was R20 000. The company tax rate is 30%. Which of the following is the adjustment to recognise the tax effect of the revaluation on consolidation? Select one A. DR Deferred tax asset R35 000; B. CR Deferred tax liability R35 O00; CR Deferred tax liability R15 000. D.DR Deferred tax asset R15 000;

Question 19 Vesty Limited has two subsidiary entities, Lemon Limited and Juice Limited. Vesty Limited owns 100% of the shares in both entities, Details of issued share capital are Vesty Limited R100 000, Lemon Limited R30 000, Juice Limited R15 000. The consolidated share capital amount of the Vesty Lemon Juice group is: Select one A. R130 000 B.R100 000 C.R115 000 D. R145 000

Question 20 Grood Limited acquired 100% of the share capital of Weak Limited for R100 000 which reflects the fair value of the company's assets, liabilities and contingent liabilities, The cost of the combination was R160 000, At acquisition date Weak Limited had a book carrying amount of R8 000 for goodwill The company tax rate is 30%. The unrecorded amount of goodwill that must recognised on the consolidation worksheet is: Select one: A R68 000 B. R52 000 C. R60 000 D. R35 000

Question 21

Excelsior Limited acquired 1007% of the shares in Arthur Limited on a cum.divu, basis for R100 000. At acquisition date the subsidiary had a declared dividend of R5 000.The pre-acquisition entry must include the following line: Select one:

A CR Shares in subsidiary R100 000 B.CR Shares in subsidiary R105 000; C. CR Shares in subsidiary R5 000. D. CR Shares in subsidiary RI5 000; R100 000-5000= 95 000. the payment of dividendoccurred before business combination so it won't formpart of business combination payment,

Question 22 Leader Limited acquired 100% of the share capital of Follower Limited. The Follower had issued share capital of R100 000, The book values of Follouwer Limited's assetswere: Land R50 000, Equipment R60 000, The fair values of these assets were: Land R90 000, Equipment R70 000. The tax rate is 30%. The net revaluation of the assets is Select one' A R160 000 B. R35 000 (40 000+10 000)x (100%-30%). revaluation amount isrecorded after tax C. R110 000 D. R100 000

Question 23 Winter Limited sold goods to its parent entity at a proht of R5 000, The goods had originally cost Winter Limited R20 000. The consolidation adjustment entry to eliminate this transaction would include the following item:

Select one: A. CR Cost of sales R15 000; B. CR Cost off sales R25 000 (elimination of intragroup sales) cost+ profAt sales (20 000+ 5000)= 25 000 Revenue C. CR Cost of sales R5 000; D. CR Cost of sales R20 000.

Question 24 Question text Vesty Limited has two subsidiary entities, Lemon Limited and Juice Limited. Vesty Limited owns 100% of the shares in both entities. Details of issued share capital are Vesty Limited R100 000, Lemon Limited R30 000, Juice LimitedR15 000. The consolidated share capital amount of the Vesty Lemon Juice group is:

Select one: A.R145 000 B. R130 000 C. R100 000 D.R115 000

Question 25

Subsequent to acquisition date the goodwill acquired through a business combination was considered to havebeen impaired by R5 000. The consolidation worksheet entry to adjust for this event is

Select one: A DR Retained earnings R5 000; since acquisition transactions (expense/loss)at the beginning of the are written off against retained earnings. B.CR Goodwill R5 000; C.CR Investment in shares of subsidiary R5 000; D. CR Accumulated impairment losses R5 000;

Question 26

Question text Vesty Limited has two subsidiary entities, Lemon Limited and Juice Limited. Vesty Limited owns 100% of the shares in both entities. Details of issued share capital are Vesty Limited R100 000, Lemon Limited R30 000, Juice Limited R15 000. The consolidated share capital amount of the Vesty Lemon Juice group is: Select one: A.R145 000 B. R130 000 C. R100 000 D.R115 000