Elimination of intra-entity profit or loss may be allocated between the parent and noncontrolling interest. True or False
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Question (10)
1- Elimination of intra-entity profit or loss may be allocated between the parent and noncontrolling interest.
True or False
2- Consolidating entries to eliminate intra-entity transfers of property need to be made only in the year of transfer.
True or False
3- In consolidations, downstream sales (from parent to subsidiary) are eliminated, and the intra-entity gain needs to be allocated between the parent and subsidiary.
True or False
4- Intra-entity transactions transferring assets subject to
True or False
5- Reporting financial statements values reflecting the single entity perspective is the primary objective of consolidating entries.
True or False
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- When an entity sells a non-current asset at a profit to another entity within the same group, which of the following adjustments is necessary on consolidation? Select one: a. Dr Asset, DR Gain on sale b. Dr Gain on sale, CR Asset c. Dr Gain on sale, CR Cash d. Dr Asset, CR CashAny inter-company gain on a downstream sale of fixed assets should be recognized in consolidated net income: I. in the year of the downstream sale.II. over the period of time the subsidiary uses the asset.III. in the year the subsidiary sells the assets to an unrelated party. Group of answer choices I. II. III. I and IIS1: Under the acquisition method, if the fair values of identifiable net assets exceed the value implied by the purchase price of the acquired company, the excess should be accounted for goodwill. S2: With an acquisition, direct and indirect expenses are considered a par of the total cost of the acquired company. Both statements are Only S1 is Only S2 is Both statements are 2. Following the completion of a business combination in the form of a statutory consolidation, what is the balance in the new corporation’s Retained earningsaccount? The acquirer retained earnings accountbalance Thesum of the acquirer and acquiree retained earnings account The acquiree retained earnings accountbalance Zero 3. S1: The acquisition-related costs in a business combination to be expensed immediately include cost of issuing debt securities. S2: In a business combination any “gain on bargain purchase” shall be recognized in other comprehensive income. Only S2 is Both statements are Both statements…
- In a business combination, an acquirer's interest in the fair value of the net assets acquired exceeds the consideration transferred in the combination. Under PFRS 3 Business Combinations, the acquirer should A. recognize the excess immediately in profit or los B. recognize the excess immediately in other comprehensive income C. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in other comprehensive income D. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in profit or lossa. Since its enactment, PSAK 22: Business Combinations must be applied to all acquisitions. Explain how the treatment for goodwill should be based on PSAK 22. b. From a consolidated point of view, when should the profit be recognized on intercompany sales of depreciable assets and non-depreciable assets?In a business combination, an acquirer's interest in the fair value of the net assets acquired exceeds the consideration transferred in the combination. Under IFRS 3 Business Combinations, the acquirer should a. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in profit or loss b. recognize the excess immediately in other comprehensive income c. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in other comprehensive income d. recognize the excess immediately in profit or loss
- An intra- entity transfer of a depreciable asset took place whereby the transfer price exceeded the book value of the asset. Which statement is true with respect to the year following the year in which the transfer occurred? Multiple Choice A worksheet entry is made with a debit to gain for an upstream transfer. A worksheet entry is made with a debit to investment in subsidiary for a downstream transfer when the parent uses the equity method. No worksheet entry is necessary. A worksheet entry is made with a debit to retained earnings for a downstream transfer, regardless of the method used account for the investment. A worksheet entry is made with a debit to gain for a downstream transfer.Which of the following income items may affect both Consolidated Net Income attributable to Parent and Non-Controlling Interest in Profit? * A. Gain on bargain purchase arising from business combination. B. Gain (loss) arising from intercompany sale of fixed assets from parent to subsidiary. C. Answer not given D. Amortization of excess in merchandise inventory of the acquired company. E. Impairment of a goodwill recognized using the proportionate or relevant share.Statement 1: Non-controlling interest in subsidiary's net income is never affected by a gain on the transfer of depreciable asset. Statement 2: When change in the estimated life of depreciable assests occurs at the time of an intercompany sales, the treatment is different than if the change occured while the asset remained on the books of the selling affiliate . Which statement/s is TRUE?
- Under PFRS 3, when is a gain recognized in consolidating financial information? Group of answer choices a.When the amount of a bargain purchase exceeds the value of the applicable liability held by the acquired company. b.In an acquisition when the value of all assets and liabilities cannot be determined. c.When any bargain purchased is created d.In a combination created in the middle of the fiscal yearStatement I. Upon consolidation, the goodwill account should be debited in the elimination entry if the consideration transferred, previously held interest, and non-controlling interest are less than the fair value of net assets acquired.Statement II. In a net asset acquisition, the acquirer should recognize the goodwill as an asset in its separate financial statements. a. Both statements are true. b. Both statements are false. c. Statement I is true; Statement II is false. d. Statement I is false; Statement II is true.3. Which is true regarding the Investment in SubsidiaryStock account?*A. It is accounted for in the parent's books and is included as non - current assets in the parent's balance sheetB. It is not included in the consolidated balance sheet ofparent and subsidiaryC. It is decreased and or increased by the differencebetween fair value and book value of net assets of thesubsidiary for consolidation purposes.Id] All of the above