Exam 17: Consolidation: Wholly Owned Subsidiaries

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 $5000 lower 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:

In relation to pre-acquisition of a subsidiary entity, which of the following events can cause a change in the pre-acquisition entry subsequent to acquisition date? I Transfers from post-acquisition retained earnings II Bonus dividends paid from pre-acquisition equity III Transfers from pre-acquisition retained earnings IV Impairment of goodwill

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?

When preparing consolidated financial statements, adjustments for pre-acquisition equity and inter-entity transactions are recorded:

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:

There is no recognition of a deferred tax item in respect to Goodwill because it is a residual amount and the recognition of a deferred tax item would:

For entities wanting to use the cost model of accounting, the revaluation of a subsidiary's assets would be undertaken in the:

Eeny Limited has two subsidiary entities, Meeny Limited and Miney Limited. Eeny Limited owns 100% of the shares in both entities. Details of issued share capital are: $\bullet$ Eeny Limited $100 000 $\bullet$ Meeny Limited $30 000 $\bullet$ Miney Limited $15 000 The consolidated share capital amount of the Eeny Meeny Miney group is: