Quiz 31: Further Consolidation Issues Iii: Accounting for Indirect Ownershi
Business
Q 1Q 1
The non-controlling interest in post-acquisition movement in reserves and post-acquisition profits is based on the combined sum of both direct non-controlling interest and indirect non-controlling interest.
Free
True False
False
Q 2Q 2
The non-controlling interest in post-acquisition capital and reserves will be based on direct non-controlling interest.
Free
True False
False
Q 3Q 3
Non-sequential acquisition is when a parent acquires its interest in the intermediate subsidiary before the intermediate subsidiary acquires its interest in the other subsidiary.
Free
True False
False
Q 4Q 4
Non-sequential acquisition is when a parent acquires its interest in the intermediate subsidiary after the intermediate subsidiary acquires its interest in the other subsidiary.
Free
True False
Free
True False
Q 6Q 6
The elimination of the parent entity's investment in a subsidiary will be done by eliminating the investment against the parent entity's direct and indirect ownership interest in pre-acquisition share capital and reserves.
Free
True False
Q 7Q 7
An ultimate parent entity may obtain a controlling indirect interest in another entity as a result of holding a controlling interest in the immediate parent entity of that other entity:
Free
True False
Q 8Q 8
A Ltd owns 75 per cent of the issued capital of B Ltd, B Ltd owns 69 per cent of the issued capital of C Ltd, and C Ltd owns 60 per cent of the issued capital of D Ltd. The only entity that is not an immediate parent entity is D Ltd, and A Ltd is the ultimate parent entity:
Free
True False
Q 9Q 9
A Ltd owns 80 per cent of the issued capital of B Ltd, B Ltd owns 70 per cent of the issued capital of C Ltd, and B Ltd owns 50 per cent of the issued capital of D Ltd. The only entity that is not an immediate parent entity is D Ltd.
Free
True False
Q 10Q 10
A Ltd owns 60 per cent of the issued capital of B Ltd, B Ltd owns 80 per cent of the issued capital of C Ltd, and B Ltd owns 70 per cent of the issued capital of D Ltd. The ultimate parent entity is B Ltd.
Free
True False
Q 11Q 11
It is not possible for one entity to control another entity without any direct ownership interest:
Free
True False
Free
True False
Q 13Q 13
When a parent acquires its interest in an intermediate subsidiary after the intermediate subsidiary acquires an interest its own subsidiary, this is referred to as a non-sequential acquisition:
Free
True False
Q 14Q 14
The order of acquisition of subsidiaries (i.e., sequential or non-sequential) is of no consequence when it comes to calculating minority interests; they are calculated the same way regardless of the order:
Free
True False
Q 15Q 15
It is possible for aggregated direct and indirect minority interests in an entity to be a greater percentage of ownership than the parent's aggregated direct and indirect ownership interests:
Free
True False
Q 16Q 16
A Ltd owns 60 per cent of the issued capital of B Ltd and B Ltd owns 55 per cent of the issued capital of C Ltd. What is A's interest in C Ltd?
A) 55 per cent
B) 24 per cent
C) 30 per cent
D) 33 per cent
E) None of the given answers.
Free
Multiple Choice
Q 17Q 17
A Ltd owns 80 per cent of the issued capital of B Ltd and B Ltd owns 60 per cent of the issued capital of C Ltd. What is A's interest in C Ltd?
A) 32 per cent
B) 48 per cent
C) 60 per cent
D) 16 per cent
E) None of the given answers.
Free
Multiple Choice
Q 18Q 18
A Ltd owns 75 per cent of the issued capital of B Ltd and B Ltd owns 65 per cent of the issued capital of C Ltd. What is the total outside equity interest in C Ltd?
A) 48.75 per cent
B) 35 per cent
C) 25.75 per cent
D) 51.25 per cent
E) None of the given answers.
Free
Multiple Choice
Q 19Q 19
A Ltd owns 85 per cent of the issued capital of B Ltd and B Ltd owns 90 per cent of the issued capital of C Ltd. What is the total outside equity interest in C Ltd?
A) 23.5 per cent
B) 10 per cent
C) 13.5 per cent
D) 15 per cent
E) None of the given answers.
Free
Multiple Choice
Q 20Q 20
The following diagram represents the ownership of issued share capital of the companies in a group. What is the ownership interest of A Ltd in D Ltd?
A) 50 per cent
B) 96.5 per cent
C) 68 per cent
D) 80 per cent
E) None of the given answers.
Free
Multiple Choice
Q 21Q 21
The following diagram represents the ownership of issued share capital of the companies in a group. What is the ownership interest of A Ltd in D Ltd?
A) 83.4 per cent
B) 76.6 per cent
C) 100 per cent
D) 86 per cent
E) None of the given answers.
Free
Multiple Choice
Q 22Q 22
The following diagram represents the ownership of issued share capital of the companies in a group. What is the total outside equity interest in D Ltd?
A) 14 per cent
B) 10 per cent
C) 30 per cent
D) 22 per cent
E) None of the given answers.
Free
Multiple Choice
Q 23Q 23
The following diagram represents the ownership of issued share capital of the companies in a group. What is the total outside equity interest in D Ltd?
A) 20 per cent
B) 33.6 per cent
C) 60 per cent
D) 24.8 per cent
E) None of the given answers.
Free
Multiple Choice
Q 24Q 24
Rose Ltd acquired a 75 per cent interest in Daisy Ltd on 1 July 2004 for a cash consideration of $758,000. On the same date, Daisy Ltd acquired a 56 per cent interest in Tulip Ltd for a cash consideration of $534,000. The fair value of the net assets of each of the companies at acquisition is as follows:
Goodwill has been determined not to have been impaired. Information for the period ended 30 June 2005 for Daisy and Tulip is as follows:
Neither dividend had been paid at the end of the period. There were no other intragroup transactions during the period. What is the minority interest in Daisy and Tulip as at 30 June 2005?
A)
B)
C)
D)
E) None of the given answers.
Free
Multiple Choice
Q 25Q 25
Pudding Ltd acquired a 90 per cent interest in Peaches Ltd on 1 July 2003 for a cash consideration of $2,300,000. On the same date, Peaches Ltd acquired a 70 per cent interest in Cream Ltd for a cash consideration of $1,100,000. The fair value of the net assets of each of the companies at acquisition is as follows:
Goodwill has been determined not to have been impaired. Information for the period ended 30 June 2004 for Peaches Ltd and Cream Ltd is as follows:
Neither dividend had been paid at the end of the period. There were no other intragroup transactions during the period. What is the minority interest in Peaches Ltd and Cream Ltd as at 30 June 2004?
A)
B)
C)
D)
E) None of the given answers.
Free
Multiple Choice
Q 26Q 26
Pasta Ltd acquired an 80 per cent interest in Sauce Ltd on 1 July 2004 for a cash consideration of $3,193,000. On the same date, Sauce Ltd acquired a 60 per cent interest in Cheese Ltd for a cash consideration of $1,340,000. The fair value of the net assets of each of the companies at acquisition is as follows:
Goodwill has been determined not to have been impaired. Information for the period ended 30 June 2005 for Sauce Ltd and Cheese Ltd is as follows:
Neither dividend had been paid at the end of the period. There were no other intragroup transactions during the period. What is the minority interest in Sauce Ltd and Cheese Ltd as at 30 June 2005?
A)
B)
C)
D)
E) None of the given answers.
Free
Multiple Choice
Q 27Q 27
Which of the following statements are incorrect?
A) The elimination of the parent's investment in a subsidiary will be done by eliminating the investment against the parent's direct ownership interest.
B) The parent's interest in post-acquisition earnings will be based on the parent's direct and indirect ownership interests.
C) The minority interest in post-acquisition earnings will be based on the direct minority interest.
D) The minority interest in pre-acquisition reserves will be based on the direct minority interest.
E) None of the given answers; they are all correct.
Free
Multiple Choice
Q 28Q 28
The following is an extract from the minority interest memorandum, used to calculate minority interests. Both subsidiaries became members of the economic entity at the same time at the start of this current period
What is the parent's direct equity (percentage) interest in Barbie Limited?
A) 0%.
B) 10%.
C) 25%.
D) 40%.
E) Cannot determine from the information provided.
Free
Multiple Choice
Q 29Q 29
The following is an extract from the minority interest memorandum, used to calculate minority interests. Both subsidiaries became members of the economic entity at the same time at the start of this current period
What is the parent's indirect equity (percentage) interest in Barbie Limited?
A) 0%.
B) 10%.
C) 25%.
D) 40%.
E) Cannot determine from the information provided.
Free
Multiple Choice
Q 30Q 30
The following is an extract from the minority interest memorandum, used to calculate minority interests. Both subsidiaries became members of the economic entity at the same time at the start of this current period
What is the minority indirect equity (percentage) interest in Ken Limited?
A) 0%.
B) 22%.
C) 33%.
D) 40%.
E) Cannot determine from the information provided.
Free
Multiple Choice
Q 31Q 31
The following is an extract from the minority interest memorandum, used to calculate minority interests. Both subsidiaries became members of the economic entity at the same time at the start of this current period.
The line item 'Dividend received from entity within the group' is an adjustment made:
A) to prevent double-counting as the indirect minority interest of Barbie Ltd is in fact the same interest as the direct minority interest in Ken Ltd; and would have already received a share of the dividend as part of the share of profit in Ken Ltd.
B) to recognise, and eliminate, the dividend paid by Barbie Ltd directly to the parent entity.
C) to prevent double-counting as the indirect minority interest of Ken Ltd is in fact the same interest as the direct minority interest in Barbie Ltd; and would have already received a share of the dividend as part of the share of profit in Ken Ltd
D) to recognise, and eliminate, the dividend paid by Ken Ltd directly to the parent entity.
E) None of the given answers.
Free
Multiple Choice
Q 32Q 32
The following acquisition analysis relates to a non-sequential acquisition, at the time that Ginger Ltd acquires a controlling interest (acquiring 60%) in Posh Ltd. Posh Ltd had previously acquitted 75% of Scary Ltd.
What are the figures represented by (a) and (b) in the table above?
A) (a) $210,000; (b) $93,000.
B) (a) $168,000; (b) $74,400.
C) (a) $126,000; (b) $55,800.
D) (a) $280,000; (b) $124,000.
E) Cannot determine from the information provided.
Free
Multiple Choice
Q 33Q 33
The following acquisition analysis relates to a non-sequential acquisition, at the time that Ginger Ltd acquires a controlling interest (acquiring 60%) in Posh Ltd. Posh Ltd had previously acquitted 75% of Scary Ltd.
What are the figures represented by (c) and (d) in the table above?
A) (a) $176,000; (b) $54,000.
B) (a) $150,000; (b) $67,500.
C) (a) $146,000; (b) $54,000.
D) (a) $146,000; (b) $67,500.
E) Cannot determine from the information provided.
Free
Multiple Choice
Q 34Q 34
The following diagram represents the ownership of issued share capital of the companies in a group.
A) 12.6%; 23.4%;
B) 23.4%; 12.6%;
C) 40%; 60%;
D) 60%; 40%;
E) 83.4%; 12.6%.
Free
Multiple Choice
Q 35Q 35
The following diagram represents the ownership of issued share capital of the companies in a group.
What is the direct parent entity interest and direct non-controlling interest in D Ltd, respectively?
A) 12.6%; 23.4%;
B) 23.4%; 12.6%;
C) 40%; 60%;
D) 60%; 40%;
E) 60%; Zero.
Free
Multiple Choice
Q 36Q 36
Jabba Ltd acquired a 70 per cent interest in Han Ltd on 30 June 2012 for $2,000,000. On the same date, Han Ltd acquired a 60 per cent interest in Leia Ltd for a cash consideration of $1,600,000. The purchase price represents the fair value of consideration transferred for both investments.
The share capital and retained earnings at the date of acquisition are as follows:
What is the non-controlling interest in Han Ltd and Leai Ltd, respectively on the date of acquisition using the full goodwill method (round to the nearest dollar)?
A) $780,000; $960,000;
B) $857,143; 1,066,667;
C) $1,820,000; $1,440,000
D) $2,000,000; $1,600,000;
E) $2,857,143; $2,666,667.
Free
Multiple Choice
Q 37Q 37
Jabba Ltd acquired a 70 per cent interest in Han Ltd on 30 June 2012 for $2,000,000. On the same date, Han Ltd acquired a 60 per cent interest in Leia Ltd for a cash consideration of $1,600,000. The purchase price represents the fair value of consideration transferred for both investments
The share capital and retained earnings at the date of acquisition are as follows:
What is the non-controlling interest in Han Ltd and Leai Ltd, respectively on the date of acquisition using the partial goodwill method (round to the nearest dollar)?
A) $780,000; $960,000;
B) $857,143; $1,066,667;
C) $1,820,000; $1,440,000
D) $2,000,000; $1,600,000;
E) $2,857,143; $2,666,667.
Free
Multiple Choice
Q 38Q 38
Jabba Ltd acquired a 70 per cent interest in Han Ltd on 30 June 2012 for $2,000,000. On the same date, Han Ltd acquired a 60 per cent interest in Leia Ltd for a cash consideration of $1,600,000. The purchase price represents the fair value of consideration transferred for both investments
The following information is available:
No dividends have been declared since acquisition and there were no intragroup transactions during the year.
What is the non-controlling interest in Han Ltd and Leai Ltd as at 30 June 2013, respectively using the partial goodwill method (round to the nearest dollar)?
A) $780,000; $960,000;
B) $857,143; 1,066,667;
C) $900,000; $1,134,000
D) $977,143; $1,240,667;
E) $2,857,143; $2,666,667.
Free
Multiple Choice