Acquirer Limited purchased 75 per cent of Subby Limited for $45 000. The fair value of identifiable assets was $95 000,
30. Acquirer
Limited purchased 75 per cent of Subby Limited for $45 000. The fair value of
identifiable assets was $95 000, and the fair value of liabilities and
contingent liabilities amounted to $47 000. According to AASB 10, what would be
the amount of ‘goodwill allocated to non-controlling interests of Subby Limited’?
A. $3000
B. $9000
C. $12
000
D. ($3000)
Chapter – Chapter 29 #30
Difficulty: Hard
Section: 29.03 Calculating non-controlling
interests
31. Which
of the following statements is incorrect with regards to non-controlling
interests in subsidiaries?
A. The
requirement to eliminate the effects of intragroup transactions holds whether
or not there are non-controlling interests.
B. The
non-controlling interest’s share in the dividends paid or proposed by the
subsidiary is eliminated on consolidation.
C. The
non-controlling interest’s share of the profits of the subsidiary is calculated
after adjustments to eliminate income and expenses of the subsidiary that are
unrealised from the economic entity’s perspective.
D. Management
fees paid in an intragroup transaction are considered realised when determining
non-controlling interests in a subsidiary.
Chapter – Chapter 29 #31
Difficulty: Medium
Section: 29.03 Calculating non-controlling
interests
32. As
prescribed in AASB 10, which of the following statements is incorrect with
regards to non-controlling interests in subsidiaries?
A. Non-controlling
interests are presented in the consolidated statement of financial position
within equity, separately from the equity of the owners of the parent.
B. Profit
or loss and each component of other comprehensive income are attributed to the
owners of the parent and to the non-controlling interests.
C. Total
comprehensive income is attributed to the owners of the parent and to the
non-controlling interests even if this results in the non-controlling interests
having a deficit balance.
D. All
of the given statement are correct.
Chapter – Chapter 29 #32
Difficulty: Medium
Section: 29.03 Calculating non-controlling
interests
33. Which
of the following statements is incorrect with regards to non-controlling
interests in subsidiaries?
A. A
non-controlling interest is defined as equity in a subsidiary not attributable,
directly or indirectly, to a parent.
B. Under
the entity concept, if subsidiaries are partly owned by the parent entity, both
the parent entity and the non-controlling interests will have an ownership
interest in the subsidiary’s profits, dividend payments, and share capital and
reserves.
C. Under
the entity concept, non-controlling interests will be shown as a liability.
D. Under
the proprietary concept, non-controlling interests will be shown as a
liability.
Chapter – Chapter 29 #33
Difficulty: Medium
Section: 29.01 What is a non-controlling
interest?
34. On
1 July 2012, Han Solo Ltd acquired 80 per cent of the share capital of
Chewbacca Ltd for $400 000, which represented the fair value of the
consideration paid, when the share capital and reserves of Chewbacca Ltd were:
All
assets of Chewbacca Ltd were recorded at fair value at acquisition date, except
for equipment that had a fair value $20 000 greater than its carrying amount.
The cost of the equipment was $40 000 and it had accumulated depreciation of
$10 000. The tax rate is 30 per cent.
Using
the partial goodwill method, what is the amount of fair value adjustment and
goodwill, respectively, on 1 July 2012 for non-controlling interests in
Chewbacca Ltd?
A. $
2800; zero
B. $11
200; 22 200
C. $
2 800; $22 200
D. $11
200; $88 800
Chapter – Chapter 29 #34
Difficulty: Hard
Section: 29.03 Calculating non-controlling
interests
35. On
1 July 2012, Han Solo Ltd acquired 80 per cent of the share capital of
Chewbacca Ltd for $500 000, which represented the fair value of the consideration
paid, when the share capital and reserves of Chewbacca Ltd were:
All
assets of Chewbacca Ltd were recorded at fair value at acquisition date, except
for machinery that had a fair value $20 000 greater than its carrying amount.
The cost of the equipment was $40 000 and it had accumulated depreciation of
$10 000. The tax rate is 30 per cent.
Under the full goodwill method, what is the
amount of fair value adjustment and goodwill, respectively, on 1 July 2012 for
non-controlling interests in Chewbacca Ltd?
A. $
2800; zero
B. $11
200; zero
C. $
2 800; $22 200
D. $11
200; $88 800
Chapter – Chapter 29 #35
Difficulty: Hard
Section: 29.03 Calculating non-controlling
interests
36. Which
of the following statements is incorrect with regards to non-controlling
interests in subsidiaries?
A. A
non-controlling interest is defined as a liability in a subsidiary not
attributable, directly or indirectly, to a parent.
B. Under
the entity concept, if subsidiaries are partly owned by the parent entity, both
the parent entity and the non-controlling interests will have an ownership
interest in the subsidiary’s profits, dividend payments, and share capital and
reserves.
C. Under
the entity concept, non-controlling interests will be shown as equity.
D. Under
the proprietary concept, non-controlling interests will be shown as equity.
Chapter – Chapter 29 #36
Difficulty: Medium
Section: 29.01 What is a non-controlling
interest?
37. Which
of the following statements is incorrect with regards to non-controlling
interests in subsidiaries?
A. The
requirement to eliminate the effects of intragroup transactions does not hold
when there are non-controlling interests.
B. The
non-controlling interest’s share in the dividends paid or proposed by the subsidiary
is not eliminated on consolidation.
C. The
non-controlling interest’s share of the profits of the subsidiary is calculated
after adjustments to eliminate income and expenses of the subsidiary that are
realised from the economic entity’s perspective.
D. Management
fees paid in an intragroup transaction are considered realised when determining
non-controlling interests in a subsidiary.
Chapter – Chapter 29 #37
Difficulty: Medium
Section: 29.03 Calculating non-controlling
interests
