Exam 30: Consolidation: Other Issues

The pre-acquisition entry for the Baxter group in order to consolidate a 60% interest in a subsidiary contained the following debits. Retained earnings $6000, share capital $12 000, general reserve $2400, BCVR $1200. The direct non-controlling interest's share of the subsidiary's equity at the date of acquisition is:

Waratah Ltd acquired a 60% ownership interest in Bottle Brush Ltd on 30 June 20X5. On the same day, Bottle Brush Ltd acquired a 70% ownership interest in Honeydew Ltd. The following interentity transactions have taken place between the entities in the group during the years ended 30 June 20X6 and 30 June 20X7. On 1 July 20X5 Bottle Brush sold an item of plant to Honeydew for a profit of $20 000. The remaining useful life of the plant at the date of transfer was 4 years. -On 1 September 20X5, Honeydew paid a dividend of $70 000 from profits earned since 30 June 20X5. -Waratah lent $50 000 to Bottle Brush on 1 January 20X6. Interest charged on the loan for the year ended 30 June 20X6 was $2000 and for the year ended 30 June 20X7 was $4000. On 31 May 20X6 Waratah sold inventories to Honeydew for $15 000. Profit earned on the sale was $5000. Honeydew sold the inventories to external parties on 1 August 20X6. Details of profits earned by entities within the group for the years ended 30 June 20X6 and 30 June 20X7 are: The tax rate is 30%. The NCI share of profit in Honeydew for the year ended 30 June 20X7 is:

Waratah Ltd acquired a 60% ownership interest in Bottle Brush Ltd on 30 June 20X5. On the same day, Bottle Brush Ltd acquired a 70% ownership interest in Honeydew Ltd. The following interentity transactions have taken place between the entities in the group during the years ended 30 June 20X6 and 30 June 20X7. On 1 July 20X5 Bottle Brush sold an item of plant to Honeydew for a profit of $20 000. The remaining useful life of the plant at the date of transfer was 4 years. -On 1 September 20X5, Honeydew paid a dividend of $70 000 from profits earned since 30 June 20X5. -Waratah lent $50 000 to Bottle Brush on 1 January 20X6. Interest charged on the loan for the year ended 30 June 20X6 was $2000 and for the year ended 30 June 20X7 was $4000. On 31 May 20X6 Waratah sold inventories to Honeydew for $15 000. Profit earned on the sale was $5000. Honeydew sold the inventories to external parties on 1 August 20X6. Details of profits earned by entities within the group for the years ended 30 June 20X6 and 30 June 20X7 are: The tax rate is 30%. The NCI share of profit in Bottle Brush for the year ended 30 June 20X6 is:

Where a change in ownership interest results in the loss of control of a subsidiary:

Kerri Limited has a 60% ownership interest in Emily Limited. Emily Limited has an 80% ownership interest in Georgia Limited. As a result of these ownership interests, there is an indirect NCI in Georgia Limited of:

Alpha Limited acquired shares in Bravo Limited. At the time of this acquisition Bravo Limited already held shares in Charlie Limited. This form of acquisition of an indirect ownership interest, by Alpha Limited in Charlie Limited, is known as a/an:

When preparing consolidation adjustment entries to effect a consolidation of a multiple subsidiary structure, intragroup transactions:

Jacaranda Limited acquired a 75% ownership interest in Frangipani Limited on 30 June 20X5. On the same day, Frangipani Limited acquired a 60% ownership interest in Gardener Limited. The following interentity transactions have taken place between the entities in the group during the years ended 30 June 20X6 and 30 June 20X7: On 1 July 20X5 Gardener sold an item of plant to Jacaranda for a profit of $25 000. The remaining useful life of the plant at the date of transfer was 2 years. On 1 September 20X5, Gardener paid a dividend of $100 000 from profits earned prior to 30 June 20X5. Jacaranda lent $500 000 to Gardener on 1 January 20X6. Interest charged on the loan for the year ended 30 June 20X6 was $20 000 and for the year ended 30 June 20X7 was $40 000. On 31 May 20X6 Frangipani sold inventories to Gardener for $15 000. Profit earned on the sale was $1500. Gardener sold the inventories to external parties on 1 August 20X6. Details of profits earned by entities within the group for the years ended 30 June 20X6 and 30 June 20X7 are: The tax rate is 30%. The effect of the dividend paid by Gardener to Frangipani on the NCI of Gardener for the year ended 30 June 20X6 is:

In a multiple subsidiary structure, the indirect non-controlling interest is entitled to a proportionate share of:

Caloundra Limited has an 85% ownership interest in Minchinton Limited. Minchinton Limited has a 55% ownership interest in Moreton Limited. As a result of these ownership interests, there is a direct ownership interest in Moreton Limited amounting to:

An indirect non-controlling interest arises:

In a situation where a parent acquires shares in a subsidiary, and the subsidiary later acquires a controlling interest in another entity, the ownership structure is:

Jacaranda Limited acquired a 75% ownership interest in Frangipani Limited on 30 June 20X5. On the same day, Frangipani Limited acquired a 60% ownership interest in Gardener Limited. The following interentity transactions have taken place between the entities in the group during the years ended 30 June 20X6 and 30 June 20X7: On 1 July 20X5 Gardener sold an item of plant to Jacaranda for a profit of $25 000. The remaining useful life of the plant at the date of transfer was 2 years. On 1 September 20X5, Gardener paid a dividend of $100 000 from profits earned prior to 30 June 20X5. Jacaranda lent $500 000 to Gardener on 1 January 20X6. Interest charged on the loan for the year ended 30 June 20X6 was $20 000 and for the year ended 30 June 20X7 was $40 000. On 31 May 20X6 Frangipani sold inventories to Gardener for $15 000. Profit earned on the sale was $1500. Gardener sold the inventories to external parties on 1 August 20X6. Details of profits earned by entities within the group for the years ended 30 June 20X6 and 30 June 20X7 are: The tax rate is 30%. The NCI share of profit in the Frangipani group for the year ended 30 June 20X6 is:

When calculating the direct non-controlling interest share of equity, consolidation adjustments are needed to:

Caloundra Limited has an ownership interest of 60% in a subsidiary Aroona Limited. Aroona owns 70% of Bribie Limited. Since acquisition date the retained earnings of Bribie Limited have increased from $100 000 to $150 000. The direct non-controlling interest in the retained earnings of Bribie is:

Which of the following can result in a loss of control by a parent over a subsidiary?

Consider the following economic entity structure. The indirect NCI in B Ltd is the same group of shareholders as the:

In a multiple subsidiary structure, the direct non-controlling interest is entitled to a proportionate share of:

In a group that has a multiple subsidiary structure, the direct non-controlling interest is entitled to:

Nambour Limited has a direct ownership interest of 70% in Noosa Limited. Liao Limited has a direct ownership interest of 60% in Mudjimba Limited. The indirect non-controlling interest in Mudjimba Limited is: