The test indicating that an intragroup business transaction has been realised is:

Learning Objective 22.1 Explain the need for making adjustments for intragroup transactions

a.the involvement of an external party in the transaction

b.the generation of profit from the transaction

c.whether or not an operating profit or loss occurred as a result of the transaction

d.the presence of only entities within the group as parties to the transaction.

IFRS 10 requires that intragroup transactions be:

Learning Objective 22.1 Explain the need for making adjustments for intragroup transactions

a.eliminated on consolidation to the extent of the parent's interest in the subsidiary.

b.adjusted for in the books of the parent and subsidiary to the extent of the parent's interest in the subsidiary.

A subsidiary entity sold inventory to its parent entity at a profit of 4 000. The goods had originally cost the subsidiary 10000. 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:

Learning Objective 22.2 Prepare worksheet entries for intragroup transactions involving profits and losses in beginning and ending inventory

a.CRInventory4 000

b.CRInventory6 000

c.CRInventory10000

d,CRInventory14 000.

A subsidiary entity sold inventory to its parent entity at a profit of 8 000. The goods had originally cost the subsidiary 20000. 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:

Learning Objective 22.2 Prepare worksheet entries for intragroup transactions involving profits and losses in beginning and ending inventory

a.CRCost of sales28 000

b.CRCost of sales20000

c.CRCost of sales12 000

d.CRCost of sales8 000.

A subsidiary entity sold goods to its parent entity at a profit of 10000. The goods had originally cost the subsidiary 15000. At reporting date, the parent still held all of the goods. Which of the following adjustments must be included as part of the consolidation entry to eliminate this transaction?

Learning Objective 22.2 Prepare worksheet entries for intragroup transactions involving profits and losses in beginning and ending inventory

a.CRInventory10000

b.CRInventory15000

c.DRInventory25000

d.DRInventory15000

In May 20X7, a parent entity sold inventory to a subsidiary entity for 30000. The inventory had previously cost the parent entity 24000. 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:

Learning Objective 22.2 Prepare worksheet entries for intragroup transactions involving profits and losses in beginning and ending inventory

a.

Cash

Dr

24 000

Sales revenue

Cr

24 000

Cost of sales

Dr

24 000

Inventory

Cr

24 000

b.

Sales revenue

Dr

24 000

Cash

Cr

24 000

Inventory

Dr

24 000

Cost of sales

Cr

24 000

c.

Sales revenue

Dr

30000

Cost of sales

Cr

6 000

Inventory

Cr

24 000

d

Sales revenue

Dr

30000

Cost of sales

Cr

24 000

Inventory

Cr

6 000

c.adjusted for in full in the books of the parent and subsidiary.

d.eliminated in full on consolidation.

During the year ended 30 June 20X7 a subsidiary entity sold inventory to its parent entity at a profit of 8 000. The goods had originally cost the subsidiary 20000. At the end of 30 June 20X7 all the inventory was still on hand. Ignoring tax effects, the adjustment entry to deal with this transaction on consolidation during the year ended 30 June 20X8 would include the following line item:

Learning Objective 22.2 Prepare worksheet entries for intragroup transactions involving profits and losses in beginning and ending inventory

a.DRCost of sales8 000

b.CRCost of sales8 000

c.DRCost of sales20000

d.CRCost of sales20000.

A subsidiary entity sold inventory to a parent entity for $30000. The inventory had previously cost the subsidiary entity $24000. 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:

Learning Objective 22.2 Prepare worksheet entries for intragroup transactions involving profits and losses in beginning and ending inventory

Angelo Limited sold inventory to its parent entity at a profit of $4 000. The inventory cost Angelo Limited $16000. At the end of the reporting period the parent had sold 50% of the inventory to an external party. The consolidation adjustment entry (excluding tax effects) will eliminate unrealised profit amounting to:

Learning Objective 22.2 Prepare worksheet entries for intragroup transactions involving profits and losses in beginning and ending inventory

a.$2 000

b.$4 000

c.$12 000

d.$16 000

During the year ended 30 June 20X7 a subsidiary entity sold inventory to a parent entity for $30000. The inventory had previously cost the subsidiary entity $24000. By 30 June 20X7 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 30 June 20X8 is:

Learning Objective 22.2 Prepare worksheet entries for intragroup transactions involving profits and losses in beginning and ending inventory

A non-controlling interest (NCI) is a contributor of:

Learning Objective 23.1 Discuss the nature of the non-controlling interest (NCI)

a.equity to a consolidated group;

b.debt to a consolidated group;

c.assets to a consolidated group;

d.profit to a consolidated group.

According to IFRS 10, the term 'non-controlling interest' means:

Learning Objective 23.1 Discuss the nature of the non-controlling interest (NCI)

a.the total equity of the combined group

b.the equity in the parent entity other than the portion owned by the subsidiary entity

c.the equity in the economic entity other than that which can be attributed to the subsidiary entity

d.equity in a subsidiary not attributable, directly or indirectly, to a parent.

According to IFRS 10, NCI is classified as:

Learning Objective 23.1 Discuss the nature of the non-controlling interest (NCI)

a.part of the equity of the parent entity

b.part of the equity of the group

c.a liability of the parent entity

d.a liability of the group.

When preparing and presenting a consolidated statement of comprehensive income the NCI is:

Learning Objective 23.1 Discuss the nature of the non-controlling interest (NCI)

a.presented as a separate component of revenue

b.shown as a separate component of profit before tax and a separate component of tax expense

c.shown as a separate component of each line item

d.presented as a separate portion of profit or loss.

In a consolidated statement of financial position, the NCI is shown:

Learning Objective 23.1 Discuss the nature of the non-controlling interest (NCI)

a.separately within the non-current liabilities

b.separately within the non-current investments

c.separately within the equity section

d.as part of the total current liabilities of the group.

When preparing a consolidated statement of changes in equity, IFRS 10 requires that any NCI in equity of subsidiaries is:

Learning Objective 23.1 Discuss the nature of the non-controlling interest (NCI)

a.shown as a one-line item

b.disclosed in the statement of financial position, and not in the statement of changes in equity

c.shown as a share of total ending equity of the subsidiary only

d.shown on a line-by-line basis.

A NCI is entitled to a share of:

IEquity of the parent at acquisition date

IICurrent period profit or loss of the subsidiary entity

IIIChanges in equity of the subsidiary since acquisition date and the beginning of the financial period

IVEquity of the subsidiary at acquisition date

Learning Objective 23.1 Discuss the nature of the non-controlling interest (NCI)

a.I, II and III

b.I and II only

c.II, III and IV only

d.III only.

Xin Limited paid 12 000 for 75% of Yan Limited. At the date of acquisition Yan Limited had equity as follows:

Share capital of 10000

Retained earnings of 5000

Other reserves of 3000

All of Yan Limited's assets and liabilities were recorded at fair value. The fair value of identifiable net assets acquired by Xin Limited amounted to:

Learning Objective 23.2 Explain the effects of the NCI on the consolidation process

a.9750

b.12 000

c.13 500

d.18 000