Question 8

question 8

Question text

The consolidation adjustments in relation to intragroup borrowings:

Select one:

a. do not require tax-effect entry.

b. increase the group's net assets.

c. increase the group's interest revenue.

d. decrease the group's income tax expense.

Question 9

Question text

Which of the following statements is incorrect?

Select one:

a. the effects of intragroup transactions need to be eliminated in full.

b. the effects of intragroup transactions that need to be eliminated are those related to the current profit.

c. the adjustments for the elimination of the effects of intragroup transactions may need to be repeated in subsequent periods.

d. the effects of intragroup transactions are recognised in the individual statements of financial position and/or the individual statements of comprehensive income.

Question 10

Question text

Genny Ltd sold an item of plant to its subsidiary, Paul Ltd, on 1 January 2019 for $50000. The asset had cost Genny Ltd $60000 and had an useful life of 6 years when acquired on 1 January 2017 from an external party. The adjustment necessary on consolidation in relation to the transfer of plant as at 30 June 2019 will result in:

Select one:

a. an increase in current year profit.

b. a decrease in current year profit.

c. an increase in current year profit and non-current assets.

d. a decrease in current year profit and non-current assets.

Question 11

Question text

A non-controlling interest contributes to a consolidated group?

Select one:

a. assets

b. profit

c. equity

d. liabilities

Question 12

Question text

Non-controlling interest is entitled to a part of the equity of the:

Select one:

a. parent entity.

b. subsidiary entity.

c. parent entity as reflected in the consolidated equity.

d. subsidiary entity as reflected in the consolidated equity.

Question 13

Question text

Under the partial goodwill method:

Select one:

a. only goodwill acquired by NCI will be recognised.

b. the NCI is measured at fair value of the shares they own.

c. the goodwill will be recognised in the business combination valuation entries.

d. the NCI is measured at the NCI's proportionate share of the fair value of acquiree's identifiable assets and liabilities.

Question 14

Question text

In Kenny Group's consolidation worksheet, the opening balance of retained earnings under 'Group' column shows a balance of $140 000. If there is a debit entry of $32 000 in the NCI column, the opening balance of retained earnings under 'Parent' column would be:

Select one:

a. $108 000.

b. $140 000.

c. $172 000.

d. $32 000.