1. Sydney plc acquired 60% of the ordinary shares in Kidney Ltd on January 1, 2013. Kidney' Ltd's retained earnings for the year to 31 December 2013 is $10,000. What is the non-controlling interest in the consolidated statement of profit or loss for the year ended 31 December 2013. Select one: a. $4,000 b. $10,000 c. $2,000 d. $6000 2.The issued share capital of Landmark Co. Ltd consists of 400,000 ordinary shares of 25cents each . The reserves of the company currently stands at $120,000. Seaside Plc owns 300,000 ordinary shares in Landmark. What is the value of the Non-controlling interest. Select one: a. $2,000 b. $55000 c. $10,000 d. $25,000 3. What are the group profits commonly referred to when they are earned and generated whilst under the parent company's control? Select one: a. Post-acquisition profit b. Pre-acquisition profit c. non-controlling interest d. Ex-acquisition profits 4.As at 31 Decmber 2013 the parent company has on its statement of financial position, trade receivables totalling $85,000. Its subsidiary company on the same day shows trade receivables of $40,000 of which $10,000 is anintra-group debt due from the parent company. In the consolidated statement of financial position for the group, what is the amount of trade receivables ? Select one: a. $135,000 b. $125,000 c. $45,000 d. $115,000 5.Which of the following is not specifically identified as an indicator of the existence of significant influence in another company? Select one: a. Representation on the board of directors b. participation in the policy making process c. interchange of managerial personnel d. shareholding not less than 15% 6.Which of the following statement(s) apply when consolidating statements of financial position Select one: a. Subsidiary’s asset values need to be updated at the end of each accounting period b. The group share of the whole of subsidiary’s profit is included within group profit c. All inter-company balances should be cancelled d. Inter company profit should be eliminated unless it is realised by sale to an outsider 7.With regard to preparing consolidated statements of financial position which of the following statements is / are correct? Select one: a. Only the group portion of any unrealised profit need be eliminated. b. An amount owed to each other within the group needs to be cancelled c. Any unrealized profit made by a subsidiary should be eliminated from its profit d. the consolidated statement of financial position reports only parent’s goodwill 8. Which of the following companies would qualify to be regarded as subsidiaries of Alpha? Select one or more: a. Gamma in which Alpha has 25% shares and two places on the board of directors b. Beta in which Alpha has 15% votes and a place on the board of directors c. Delta in which Alpha has 52% votes but no place on the board of directors 9. The user of a leased asset is referred to as the: Select one: a. lessor b. lessee c. purchaser d. vendor d. Theta in which Alpha holds 100% votes and all places on the board of directors 10.A finance lease is an agreement between an owner of an asset and a user of that asset wherein the: Select one: a. ownership passes to the lessor on inception date of the lease; b. legal title to property is transferred to the lessee when the first lease payment is made; c. usual risks and benefits of ownership are transferred to the user; d. substantially all of the risks and benefits of ownership remain with the lessor.

1. Sydney plc acquired 60% of the ordinary shares in Kidney Ltd on January 1, 2013. Kidney' Ltd's retained earnings for the year to 31 December 2013 is $10,000. What is the non-controlling interest in the consolidated statement of profit or loss for the year ended 31 December 2013. Select one: a. $4,000 b. $10,000 c. $2,000 d. $6000 2.The issued share capital of Landmark Co. Ltd consists of 400,000 ordinary shares of 25cents each . The reserves of the company currently stands at $120,000. Seaside Plc owns 300,000 ordinary shares in Landmark. What is the value of the Non-controlling interest. Select one: a. $2,000 b. $55000 c. $10,000 d. $25,000 3. What are the group profits commonly referred to when they are earned and generated whilst under the parent company's control? Select one: a. Post-acquisition profit b. Pre-acquisition profit c. non-controlling interest d. Ex-acquisition profits 4.As at 31 Decmber 2013 the parent company has on its statement of financial position, trade receivables totalling $85,000. Its subsidiary company on the same day shows trade receivables of $40,000 of which $10,000 is anintra-group debt due from the parent company. In the consolidated statement of financial position for the group, what is the amount of trade receivables ? Select one: a. $135,000 b. $125,000 c. $45,000 d. $115,000 5.Which of the following is not specifically identified as an indicator of the existence of significant influence in another company? Select one: a. Representation on the board of directors b. participation in the policy making process c. interchange of managerial personnel d. shareholding not less than 15% 6.Which of the following statement(s) apply when consolidating statements of financial position Select one: a. Subsidiary’s asset values need to be updated at the end of each accounting period b. The group share of the whole of subsidiary’s profit is included within group profit c. All inter-company balances should be cancelled d. Inter company profit should be eliminated unless it is realised by sale to an outsider 7.With regard to preparing consolidated statements of financial position which of the following statements is / are correct? Select one: a. Only the group portion of any unrealised profit need be eliminated. b. An amount owed to each other within the group needs to be cancelled c. Any unrealized profit made by a subsidiary should be eliminated from its profit d. the consolidated statement of financial position reports only parent’s goodwill 8. Which of the following companies would qualify to be regarded as subsidiaries of Alpha? Select one or more: a. Gamma in which Alpha has 25% shares and two places on the board of directors b. Beta in which Alpha has 15% votes and a place on the board of directors c. Delta in which Alpha has 52% votes but no place on the board of directors 9. The user of a leased asset is referred to as the: Select one: a. lessor b. lessee c. purchaser d. vendor d. Theta in which Alpha holds 100% votes and all places on the board of directors 10.A finance lease is an agreement between an owner of an asset and a user of that asset wherein the: Select one: a. ownership passes to the lessor on inception date of the lease; b. legal title to property is transferred to the lessee when the first lease payment is made; c. usual risks and benefits of ownership are transferred to the user; d. substantially all of the risks and benefits of ownership remain with the lessor.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1. Sydney plc acquired 60% of the ordinary shares in Kidney Ltd on January 1, 2013. Kidney' Ltd's retained earnings for the year to 31 December 2013 is $10,000.

What is the non-controlling interest in the consolidated statement of profit or loss for the year ended 31 December 2013.

Select one:

a. $4,000

b. $10,000

c. $2,000

d. $6000

2.The issued share capital of Landmark Co. Ltd consists of 400,000 ordinary shares of 25cents each . The reserves of the company currently stands at $120,000. Seaside Plc owns 300,000 ordinary shares in Landmark.

What is the value of the Non-controlling interest.

Select one:

a. $2,000

b. $55000

c. $10,000

d. $25,000

3. What are the group profits commonly referred to when they are earned and generated whilst under the parent company's control?

Select one:

a. Post-acquisition profit

b. Pre-acquisition profit

c. non-controlling interest

d. Ex-acquisition profits

4.As at 31 Decmber 2013 the parent company has on its statement of financial position, trade receivables totalling $85,000. Its subsidiary company on the same day shows trade receivables of $40,000 of which $10,000 is anintra-group debt due from the parent company.

In the consolidated statement of financial position for the group, what is the amount of trade receivables ?

Select one:

a. $135,000

b. $125,000

c. $45,000

d. $115,000

5.Which of the following is not specifically identified as an indicator of the existence of significant influence in another company?

Select one:

a. Representation on the board of directors

b. participation in the policy making process

c. interchange of managerial personnel

d. shareholding not less than 15%

6.Which of the following statement(s) apply when consolidating statements of financial position

Select one:

a. Subsidiary’s asset values need to be updated at the end of each accounting period

b. The group share of the whole of subsidiary’s profit is included within group profit

c. All inter-company balances should be cancelled

d. Inter company profit should be eliminated unless it is realised by sale to an outsider

7.With regard to preparing consolidated statements of financial position which of the following statements is / are correct?

Select one:

a. Only the group portion of any unrealised profit need be eliminated.

b. An amount owed to each other within the group needs to be cancelled

c. Any unrealized profit made by a subsidiary should be eliminated from its profit

d. the consolidated statement of financial position reports only parent’s goodwill

8. Which of the following companies would qualify to be regarded as subsidiaries of Alpha?

Select one or more:

a. Gamma in which Alpha has 25% shares and two places on the board of directors

b. Beta in which Alpha has 15% votes and a place on the board of directors

c. Delta in which Alpha has 52% votes but no place on the board of directors

9. The user of a leased asset is referred to as the:

Select one:

a. lessor

b. lessee

c. purchaser

d. vendor

d. Theta in which Alpha holds 100% votes and all places on the board of directors

10.A finance lease is an agreement between an owner of an asset and a user of that asset wherein the:

Select one:

a. ownership passes to the lessor on inception date of the lease;

b. legal title to property is transferred to the lessee when the first lease payment is made;

c. usual risks and benefits of ownership are transferred to the user;

d. substantially all of the risks and benefits of ownership remain with the lessor.

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