Exam 19: Consolidation: Wholly Owned Subsidiaries

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The effect of a transfer of pre-acquisition retained earnings to a general reserve on the pre-acquisition entry is to reduce the debit adjustment against retained earnings.

(True/False)

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Question 41

If the consideration transferred is greater than the acquired interest in the net fair value of the identifiable assets,liabilities and contingent liabilities of the acquiree:

(Multiple Choice)

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Question 42

Which of the following statements is incorrect?

(Multiple Choice)

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Question 43

Sippy Ltd acquired 100% of the share capital of Downs Ltd when the carrying value of Downs Ltd's plant and machinery was $100 000.The fair value of the plant on acquisition date was $150 000.The company tax rate was 30%.What is the amount of the business combination valuation reserve that must be recognised on consolidation?

(Multiple Choice)

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Question 44

When inventory that has been subject to a fair value adjustment is sold,the effect on the business combination valuation adjustment in the year of sale includes a debit to cost of sales.

(True/False)

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Question 45

The main purpose of the pre-acquisition entry is to ensure no double counting of group net assets and equity.

(True/False)

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Question 46

On 1 July 2014,Peter Limited acquired all the issued shares of Kerri Limited for $100 000 when the equity of Kerri Limited consisted of: Share capital $70 000 Retained earnings 30 000 The pre-acquisition entry at 1 July 2014 is:

(Multiple Choice)

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Question 47

Showing 41 - 47 of 47

The effect of a transfer of pre-acquisition retained earnings to a general reserve on the pre-acquisition entry is to reduce the debit adjustment against retained earnings.

If the consideration transferred is greater than the acquired interest in the net fair value of the identifiable assets,liabilities and contingent liabilities of the acquiree:

Which of the following statements is incorrect?

When inventory that has been subject to a fair value adjustment is sold,the effect on the business combination valuation adjustment in the year of sale includes a debit to cost of sales.

The main purpose of the pre-acquisition entry is to ensure no double counting of group net assets and equity.

On 1 July 2014,Peter Limited acquired all the issued shares of Kerri Limited for $100 000 when the equity of Kerri Limited consisted of: Share capital $70 000 Retained earnings 30 000 The pre-acquisition entry at 1 July 2014 is:

Nature and Regulation of Companies

Financing Company Operations

Company Operations

Fundamental Concepts of Corporate Governance

Fair Value Measurement

Accounting for Company Income Tax

Financial Instruments

Foreign Currency Transactions and Forward Exchange Contracts

Property, Plant and Equipment

Leases

Intangible Assets

Business Combinations

Impairment of Assets

Disclosure: Legal Requirements and Accounting Polices

Disclosure: Presentation of Financial Statements

Disclosure: Statement of Cash Flows

Disclosure: Translation of Financial Statements Into a Presentation Currency

Consolidation: Controlled Entities

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Associates and Joint Ventures

Investments in Joint Arrangements

Insolvency and Liquidation

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