H Preparing basic consolidated financial statements

P owns 60 percent of the voting shares of S and has the power to direct its activities. How is S treated in P's group accounts?

• 1 It is not shown
• 2 As an associate, using the equity method
• 3 As a trade investment at cost
• 4 As a subsidiary, consolidated line by line

P paid $500,000 for 80 percent of S. The fair value of the non-controlling interest was $120,000 and the fair value of S's net assets at acquisition was $560,000. What is goodwill?

• 1 $20,000
• 2 $180,000
• 3 $380,000
• 4 $60,000

The non-controlling interest in S was valued at $90,000 at acquisition. S has made $40,000 of profit since acquisition and the NCI owns 25 percent. What is the NCI at the reporting date?

• 1 $10,000
• 2 $130,000
• 3 $100,000
• 4 $90,000

P sold goods costing $600 to S for $900. Half are still held by S at the year end. What is the unrealised profit to remove?

• 1 $300
• 2 $75
• 3 $150
• 4 $450

How are intra-group receivables and payables dealt with in the consolidated statement of financial position?

• 1 They are shown in non-controlling interests
• 2 They are added together
• 3 They are shown as goodwill
• 4 They are eliminated

An investor owns 30 percent of the voting shares of an investee and has significant influence. How is the investment accounted for?

• 1 Using the equity method
• 2 At cost only
• 3 By consolidating line by line
• 4 It is not recognised

P has revenue of $1,000 and S has revenue of $400. During the year P sold goods to S for $100. What is consolidated revenue?

• 1 $1,400
• 2 $1,300
• 3 $1,200
• 4 $1,500

S was acquired part way through the year. How is S's profit for the year included in the consolidated statement of profit or loss?

• 1 Only the profit earned after the acquisition date is included
• 2 The full year's profit is included
• 3 None of the profit is included
• 4 Only the profit before acquisition is included