Question 9 (1 point)

Basil Ltd. has an 80% interest in a joint venture. Under IFRS, what is attributed to the Basil?

Question 9 options:

	100% of the realized and unrealized gains and losses arising from downstream sales
	100% of the realized and unrealized gains and losses arising from upstream sales
	80% of the realized and unrealized gains and losses arising from downstream sales
	80% of the realized and unrealized gains and losses arising from upstream sales

Question 10 (1 point)

If a parent company borrows money at an interest rate of six percent from its subsidiary, what effect (if any) will this have on the non-controlling interest?

Question 10 options:

	This would have no effect on the non-controlling interest.
	The non-controlling interest balance would be reduced by the amount of the loan.
	The subsidiary would record any interest revenue as an extraordinary gain.
	The subsidiary would book its pro-rata share of any interest revenue.

Question 11 (1 point)

Fox Co. acquired 60% of Sox Co. for $900,000. At the acquisition date, Sox had net assets with a book value of $950,000 and a fair value of $1,200,000. What is the amount of goodwill that should be reported on the consolidated SFP under the parent-company extension method and under the entity method?

Question 11 options:

	$300,000 under the parent-company extension method and $300,000 under the entity method
	$0 under the parent-company extension method and $300,000 under the entity method
	$120,000 under the parent-company extension method and $180,000 under the entity method
	$0 under the parent-company extension method and $180,000 under the entity method

Question 12 (1 point)

On the consolidated statement of financial position, which balances differ between the parent-company extension method and the entity method?

Question 12 options:

	Retained earnings and non-controlling interest
	Goodwill and non-controlling interest
	Retained earnings and goodwill
	Common shares and retained earnings

Question 13 (1 point)

Grayson Ltd. acquired 60% of the outstanding common shares of Goldberg Ltd. for $480,000. At the date of acquisition, Goldberg's shareholders' equity was $625,000. The goodwill at 100% has been determined to be $90,000 under the entity method. What is the amount of Goldberg's fair value increments?

Question 13 options:

	$85,000
	$121,000
	$70,000
	$54,000

Question 14 (1 point)

TLC Homecare Ltd. owns 100% of Errand Service for Seniors Ltd. (ESS). On January 2, 20X1, TLC bought 12 identical cars for $300,000. It promptly sold four of the cars to ESS for $112,000. ESS will amortize the cars over five years using the straight-line method. At December 31, 20X2, what is the net adjustment that should be made to accumulated depreciation in TLC's consolidated financial statements? Ignore income taxes.

Question 14 options:

	Reduction of $4,800
	Reduction of $2,400
	Reduction of $5,600
	$0

Question 15 (1 point)

What effect will the rent of $10,000 charged by the Subsidiary to the Parent Company have on the calculation of the non-controlling interest in the net income of the Subsidiary? The Parent Company owns 80% of the Subsidiary.

Question 15 options:

	The non-controlling interest will increase by $10,000.
	There is no effect on the non-controlling interest.
	The non-controlling interest will decrease by $10,000.
	The non-controlling interest will decrease by $8,000.

Question 16 (1 point)

Ngo Ltd.'s subsidiary has restricted shares. What must Ngo look at in determining non-controlling interest?

Question 16 options:

	Participation in earnings and dividends
	Participation in dividends only
	Participation in earnings only
	Number of shares only

Question 17 (1 point)

X Inc. owns 80% of Y Inc. During 2020, X Inc. sold inventory to Y for $10,000. Half of this inventory remained in Y's warehouse at year end.

Y Inc. sold inventory to X Inc. for $5,000. 40% of this inventory remained in X's warehouse at year end.

Both companies are subject to a tax rate of 40%. The gross profit percentage on sales is 20% for both companies. Unless otherwise stated, assume X Inc. uses the cost method to account for its investment in Y Inc.

What effect (if any) would Y's unrealized profits on its sales to X have on the non-controlling interest account on the consolidated balance sheet?

Question 17 options:

	There would be a decrease to the non-controlling interest account for the amount of $48.
	There would be an increase to the non-controlling interest account for the amount of $48.
	There would be an increase to the non-controlling interest account for the amount of $72.
	There would be no effect.

Question 18 (1 point)

IFRS 8 requires the disclosure of certain key information such as an organization's major customers and geographic areas of operations. Why are these disclosures required?

Question 18 options:

	To allow users to assess potential business risks
	To demonstrate that the chief operating decision-maker has made prudent decisions
	To provide sufficient information to creditors
	To allow users to see that the poor performance of one segment is usually offset by the good performance of other segments