The following is an extract from the non-controlling interest memorandum,used to calculate non-controlling interests.Both subsidiaries became members of the economic entity at the same time at the start of this current period. \[\begin{array} { | l | r | r | r | } \hline & \text { Barbie Ltd } & \text { Ken Ltd } & \text { Total NCl } \\ \hline \text { Non-controlling interest in profit after tax } & & & \\ \text { Profit as shown in respective entity's reports } & 12000 & 16000 & \\ \text { less: Dividend received from entity within group } & ( 2500 ) & & \\ \text { Profit contributed to the economic entity } & 9500 & 16000 & \\ \hline \text { Non-controlling interest } & 3800 & 9920 & 13720 \\ \hline \begin{array} { l } \text { Non-controlling interest in opening retained earings } \\ \text { Opening retained earnings } \end{array} & 15000 & 24000 & \\ \hline \text { Non-controlling interest } & 6000 & 9600 & 15600 \\ \hline \end{array}\] What is the parent's indirect equity (percentage)interest in Barbie Limited?

A) 0% B) 10% C) 25% D) 40% A) 0% B) 10% C) 25% D) 40%

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: \[\begin{array} { | l | r | r | } \hline & \text { Han Ltd } & \text { Leia Ltd } \\ \hline \text { Share capital } & 2000000 & 1600000 \\ \hline \text { Retained earnings } & \underline { 600000 } & \underline { 800000 } \\ \hline & \underline { 2600000 } & \underline { 2400000 } \\ \hline \end{array}\] 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 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

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: \[\begin{array} { | l | r | r | } \hline & \text { Han Ltd } & \text { Leia Ltd } \\ \hline \text { Share capital } & 2000000 & 1600000 \\ \hline \text { Retained earnings } & \underline { 600000 } & \underline { 800000 } \\ \hline & \underline { 2600000 } & \underline { 2400000 } \\ \hline \end{array}\] 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) €2 857 143; €2 666 667 A) €780 000; €960 000 B) €857 143; €1 066 667 C) €1 820 000; €1 440 000 D) €2 857 143; €2 666 667

Rose Ltd acquired a 75 per cent interest in Daisy Ltd on 1 July 2014 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: \[\begin{array} { | l | r | r | } \hline & \text { Daisy Ltd } & \text { Tulip Ltd } \\ \hline \text { Share capital } & 900000 & 860000 \\ \hline \text { Retained earnings } & \underline { 85000 } & \underline { 40000 } \\ \hline & 985000 & 900000 \\ \hline \end{array}\] Goodwill has been determined not to have been impaired.Using the multiple entity consolidation approach,what would the analysis of direct and indirect interests in the subsidiaries and the elimination entries be for the consolidation for 30 June 2015?

A) \[\begin{array} { | l | r | r | } \hline \text { Analysis of equity interests: } & \begin{array} { r } \text { Daisy Ltd } \\ \text { (\% interest) } \end{array} & \begin{array} { r } \text { Tulip Ltd } \\ \text { (\% interest) } \end{array} \\ \hline \text { Rose Ltd's interest: } & & \\ \hline \text { Direct } & 75 & 56 \\ \hline \text { Indirect } & & \\ \hline & & \\ \hline \text { Outside equity interest: } & & \\ \hline \text { Direct } & 25 &44 \\ \hline \text { Indirect } & & \\ \hline \end{array}\] \[\begin{array}{l} \text { Elimination entries: }\\ \begin{array} { | c | l | r | r | } \hline \mathrm { Dr } & \text { Share capital } & 900000 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 85000 & \\ \hline \mathrm { Dr } & \text { Goodwill } & 19000 & \\ \hline \mathrm { Cr } & \text { Outside equity interest } & & 246000 \\ \hline \mathrm { Cr } & \text { Investment in Daisy } & & 758000 \\ \hline & & & \\ \hline \mathrm { Dr } & \text { Share capital } & 860000 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 40000 & \\ \hline \mathrm { Dr } & \text { Goodwill } & 30000 & \\ \hline \mathrm { Cr } & \text { Outside equity interest } & & 396000 \\ \hline \mathrm { Cr } & \text { Investment in Tulip } & & 534000 \\ \hline \end{array} \end{array}\] B) \[\begin{array} { | l | r | r | } \hline \text { Analysis of equity interests: } & \begin{array} { r } \text { Daisy Ltd } \\ \text { (\% interest) } \end{array} & \begin{array} { r } \text { Tulip Ltd } \\ \text { (\% interest) } \end{array} \\ \hline \text { Rose Ltd's interest: } & & \\ \hline \text { Direct } & 75 &44 \\ \hline \text { Indirect } & & \\ \hline & & \\ \hline \text { Outside equity interest: } & & \\ \hline \text { Direct } & 25 & 14 \\ \hline \text { Indirect } & & 42 \\ \hline \end{array}\] \[\begin{array} { | c | l | l | l | } \hline \text { Elimination entries: } & & \\ \hline \text { Dr } & \text { Share capital } & 675000 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 63750 & \\ \hline \text { Dr } & \text { Goodwill } & 19250 & \\ \hline \mathrm { Cr } & \text { Investment in Daisy } & & 758000 \\ \hline & & & \\ \hline \mathrm { Dr } & \text { Share capital } & 378400 & \\ \hline \text { Dr } & \text { Retained earnings } & 17600 & \\ \hline \mathrm { Dr } & \text { Goodwill } & 138000 & \\ \hline \mathrm { Cr } & \text { lnvestment in Tulip } & & 534000 \\ \hline \end{array}\] C) \[\begin{array} { | l | r | r | } \hline \text { Analysis of equity interests: } & \begin{array} { r } \text { Daisy Ltd } \\ \text { (\% interest) } \end{array} & \begin{array} { r } \text { Tulip Ltd } \\ \text { (\% interest) } \end{array} \\ \hline \text { Rose Ltd's interest: } & & \\ \hline \text { Direct } & 75 & \\ \hline \text { Indirect } & & 42\\ \hline & & \\ \hline \text { Outside equity interest: } & & \\ \hline \text { Direct } &25 &44 \\ \hline \text { Indirect } & & 14 \\ \hline \end{array}\] \[\begin{array} { | c | l | r | r | } \hline \text { Elimination entries: } & & \\ \hline \text { Dr } & \text { Share capital } & 675000 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 63750 & \\ \hline \text { Dr } & \text { Goodwill } & 19250 & \\ \hline \mathrm { Cr } & \text { Investment in Daisy } & & 758000 \\ \hline & & & \\ \hline \mathrm { Dr } & \text { Share capital } & 481600 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 22400 & \\ \hline \mathrm { Dr } & \text { Goodwill } & 30000 & \\ \hline \mathrm { Cr } & \text { lnvestment in Tulip } & & 534000 \\ \hline \end{array}\] D) \[\begin{array} { | l | r | r | } \hline \text { Analysis of equity interests: } & \begin{array} { r } \text { Daisy Ltd } \\ \text { (\% interest) } \end{array} & \begin{array} { r } \text { Tulip Ltd } \\ \text { (\% interest) } \end{array} \\ \hline \text { Rose Ltd's interest: } & & \\ \hline \text { Direct } & 75 & \\ \hline \text { Indirect } & &42 \\ \hline & & \\ \hline \text { Outside equity interest: } & & \\ \hline \text { Direct } & 25&14 \\ \hline \text { Indirect } & & 44 \\ \hline \end{array}\] \[\begin{array} { | c | l | r | r | } \hline \text { Elimination entries: } & & \\ \hline \text { Dr } & \text { Share capital } & 675000 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 63750 & \\ \hline \text { Dr } & \text { Goodwill } & 19250 & \\ \hline \mathrm { Cr } & \text { Investment in Daisy } & & 758000 \\ \hline & & & \\ \hline \mathrm { Dr } & \text { Share capital } & 361200 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 16800 & \\ \hline \mathrm { Dr } & \text { Goodwill } & 156000 & \\ \hline \mathrm { Cr } & \text { lnvestment in Tulip } & & 534000 \\ \hline \end{array}\] A) \[\begin{array} { | l | r | r | } \hline \text { Analysis of equity interests: } & \begin{array} { r } \text { Daisy Ltd } \\ \text { (\% interest) } \end{array} & \begin{array} { r } \text { Tulip Ltd } \\ \text { (\% interest) } \end{array} \\ \hline \text { Rose Ltd's interest: } & & \\ \hline \text { Direct } & 75 & 56 \\ \hline \text { Indirect } & & \\ \hline & & \\ \hline \text { Outside equity interest: } & & \\ \hline \text { Direct } & 25 &44 \\ \hline \text { Indirect } & & \\ \hline \end{array}\] \[\begin{array}{l} \text { Elimination entries: }\\ \begin{array} { | c | l | r | r | } \hline \mathrm { Dr } & \text { Share capital } & 900000 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 85000 & \\ \hline \mathrm { Dr } & \text { Goodwill } & 19000 & \\ \hline \mathrm { Cr } & \text { Outside equity interest } & & 246000 \\ \hline \mathrm { Cr } & \text { Investment in Daisy } & & 758000 \\ \hline & & & \\ \hline \mathrm { Dr } & \text { Share capital } & 860000 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 40000 & \\ \hline \mathrm { Dr } & \text { Goodwill } & 30000 & \\ \hline \mathrm { Cr } & \text { Outside equity interest } & & 396000 \\ \hline \mathrm { Cr } & \text { Investment in Tulip } & & 534000 \\ \hline \end{array} \end{array}\] B) \[\begin{array} { | l | r | r | } \hline \text { Analysis of equity interests: } & \begin{array} { r } \text { Daisy Ltd } \\ \text { (\% interest) } \end{array} & \begin{array} { r } \text { Tulip Ltd } \\ \text { (\% interest) } \end{array} \\ \hline \text { Rose Ltd's interest: } & & \\ \hline \text { Direct } & 75 &44 \\ \hline \text { Indirect } & & \\ \hline & & \\ \hline \text { Outside equity interest: } & & \\ \hline \text { Direct } & 25 & 14 \\ \hline \text { Indirect } & & 42 \\ \hline \end{array}\] \[\begin{array} { | c | l | l | l | } \hline \text { Elimination entries: } & & \\ \hline \text { Dr } & \text { Share capital } & 675000 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 63750 & \\ \hline \text { Dr } & \text { Goodwill } & 19250 & \\ \hline \mathrm { Cr } & \text { Investment in Daisy } & & 758000 \\ \hline & & & \\ \hline \mathrm { Dr } & \text { Share capital } & 378400 & \\ \hline \text { Dr } & \text { Retained earnings } & 17600 & \\ \hline \mathrm { Dr } & \text { Goodwill } & 138000 & \\ \hline \mathrm { Cr } & \text { lnvestment in Tulip } & & 534000 \\ \hline \end{array}\] C) \[\begin{array} { | l | r | r | } \hline \text { Analysis of equity interests: } & \begin{array} { r } \text { Daisy Ltd } \\ \text { (\% interest) } \end{array} & \begin{array} { r } \text { Tulip Ltd } \\ \text { (\% interest) } \end{array} \\ \hline \text { Rose Ltd's interest: } & & \\ \hline \text { Direct } & 75 & \\ \hline \text { Indirect } & & 42\\ \hline & & \\ \hline \text { Outside equity interest: } & & \\ \hline \text { Direct } &25 &44 \\ \hline \text { Indirect } & & 14 \\ \hline \end{array}\] \[\begin{array} { | c | l | r | r | } \hline \text { Elimination entries: } & & \\ \hline \text { Dr } & \text { Share capital } & 675000 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 63750 & \\ \hline \text { Dr } & \text { Goodwill } & 19250 & \\ \hline \mathrm { Cr } & \text { Investment in Daisy } & & 758000 \\ \hline & & & \\ \hline \mathrm { Dr } & \text { Share capital } & 481600 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 22400 & \\ \hline \mathrm { Dr } & \text { Goodwill } & 30000 & \\ \hline \mathrm { Cr } & \text { lnvestment in Tulip } & & 534000 \\ \hline \end{array}\] D) \[\begin{array} { | l | r | r | } \hline \text { Analysis of equity interests: } & \begin{array} { r } \text { Daisy Ltd } \\ \text { (\% interest) } \end{array} & \begin{array} { r } \text { Tulip Ltd } \\ \text { (\% interest) } \end{array} \\ \hline \text { Rose Ltd's interest: } & & \\ \hline \text { Direct } & 75 & \\ \hline \text { Indirect } & &42 \\ \hline & & \\ \hline \text { Outside equity interest: } & & \\ \hline \text { Direct } & 25&14 \\ \hline \text { Indirect } & & 44 \\ \hline \end{array}\] \[\begin{array} { | c | l | r | r | } \hline \text { Elimination entries: } & & \\ \hline \text { Dr } & \text { Share capital } & 675000 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 63750 & \\ \hline \text { Dr } & \text { Goodwill } & 19250 & \\ \hline \mathrm { Cr } & \text { Investment in Daisy } & & 758000 \\ \hline & & & \\ \hline \mathrm { Dr } & \text { Share capital } & 361200 & \\ \hline \mathrm { Dr } & \text { Retained earnings } & 16800 & \\ \hline \mathrm { Dr } & \text { Goodwill } & 156000 & \\ \hline \mathrm { Cr } & \text { lnvestment in Tulip } & & 534000 \\ \hline \end{array}\]

Rose Ltd acquired a 75 per cent interest in Daisy Ltd on 1 July 2014 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: $\begin{array}{|l|r|r|} \hline & \text { Daisy Ltd } & \text { Tulip Ltd } \\ \hline \text { Share capital } & 900000 & 86000 \\ \hline \text { Retained earnings } & \underline{85000} & \underline{40000} \\ \hline & 985000 & 900000 \\ \hline \end{array}$ Goodwill has been determined not to have been impaired.Information for the period ended 30 June 2015 for Daisy and Tulip is as follows: \[\begin{array} { | l | r | r } \hline & \text { Daisy Ltd } & \text { Tulip Ltd } \\ \hline \text { Operating profit after tax } & 30000 & 20000 \\ \hline \text { Dividends proposed } & 20000 & 10000 \\ \hline \end{array}\] Neither dividend had been paid at the end of the period.There were no other intragroup transactions during the period.What is the non-controlling interest in Daisy and Tulip as at 30 June 2015?

A) $\begin{array}{|l|r|r|r} \hline & \text { Daisy Ltd } & \text { Tulip Ltd } \\ \hline \text { Operating profit } & 7500 & 8800 \\ \hline \text { Retained earnings } & 21250 & 17600 \\ \hline \text { Dividends } & (5000) & (4400) \\ \hline \text { Share capital } & 225000 & 378400 \\ \hline \end{array}$ B) \[\begin{array} { | l | r | r | } \hline & \text { Daisy Ltd } & \text { Tulip Ltd } \\ \hline \text { Operating profit } & 6100 & 11600 \\ \hline \text { Retained earnings } & 21250 & 17600 \\ \hline \text { Dividends } & ( 5000 ) & ( 4400 ) \\ \hline \text { Share capital } & 225000 & 378400 \\ \hline \end{array}\] C) $\begin{array}{|l|r|r|} \hline & \text { Daisy Ltd } & \text { Tulip Ltd } \\ \hline \text { Operating profit } & 7500 & 8800 \\ \hline \text { Retained earnings } & 21250 & 23200 \\ \hline \text { Dividends } & (5000) & (5800) \\ \hline \text { Share capital } & 225000 & 498800 \\ \hline \end{array}$ D) $\begin{array}{|l|r|r|} \hline & \text { Daisy Ltd } & \text { Tulip Ltd } \\ \hline \text { Operating profit } & 2500 & 5800 \\ \hline \text { Retained earnings } & 21250 & 17600 \\\hline \text { Dividends } & (5000) & (4400) \\ \hline \text { Share capital } & 225000 & 378400 \\ \hline \end{array}$ A) $\begin{array}{|l|r|r|r} \hline & \text { Daisy Ltd } & \text { Tulip Ltd } \\ \hline \text { Operating profit } & 7500 & 8800 \\ \hline \text { Retained earnings } & 21250 & 17600 \\ \hline \text { Dividends } & (5000) & (4400) \\ \hline \text { Share capital } & 225000 & 378400 \\ \hline \end{array}$ B) \[\begin{array} { | l | r | r | } \hline & \text { Daisy Ltd } & \text { Tulip Ltd } \\ \hline \text { Operating profit } & 6100 & 11600 \\ \hline \text { Retained earnings } & 21250 & 17600 \\ \hline \text { Dividends } & ( 5000 ) & ( 4400 ) \\ \hline \text { Share capital } & 225000 & 378400 \\ \hline \end{array}\] C) $\begin{array}{|l|r|r|} \hline & \text { Daisy Ltd } & \text { Tulip Ltd } \\ \hline \text { Operating profit } & 7500 & 8800 \\ \hline \text { Retained earnings } & 21250 & 23200 \\ \hline \text { Dividends } & (5000) & (5800) \\ \hline \text { Share capital } & 225000 & 498800 \\ \hline \end{array}$ D) $\begin{array}{|l|r|r|} \hline & \text { Daisy Ltd } & \text { Tulip Ltd } \\ \hline \text { Operating profit } & 2500 & 5800 \\ \hline \text { Retained earnings } & 21250 & 17600 \\\hline \text { Dividends } & (5000) & (4400) \\ \hline \text { Share capital } & 225000 & 378400 \\ \hline \end{array}$

The following acquisition analysis relates to a non-sequential acquisition,at the time that Ginger Ltd acquires a controlling interest (acquiring 60 per cent)in Posh Ltd.Posh Ltd had previously acquitted 75 per cent of Scary Ltd. $\begin{array}{|l|r|r|} \hline & \text { Posh Ltd } & \begin{array}{r} \text { Ginger Ltd } \\ \text { interest } \end{array} \\ \hline \text { Share capital at acquisition date } & 280000 & \text { (a) } \\ \text { Retained earnings at acquisition date } & 124000 & \text { (b) } \\ \text { Share of post-acquisition earnings of Scary Ltd attributable to Posh } & 90000 & \text { (c) } \\ \text { Ltd prior to Ginger's acquisition of Posh Ltd } & & \\ \text { Increase in retained earnings of Scary Ltd } & & \\ \text { ((d) }-56000) & & \\ \hline \end{array}$ 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 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

Pudding Ltd acquired a 90 per cent interest in Peaches Ltd on 1 July 2013 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: $\begin{array}{|l|r|r|} \hline & \text { Peaches Ltd } & \text { Cream Ltd } \\ \hline \text { Share capital } & 1340000 & 100000 \\ \hline \text { Retained earnings } & \underline{950000} &{500000}\\ \hline & 2290000 & 1500000 \\ \hline \end{array}$ Goodwill has been determined not to have been impaired.Information for the period ended 30 June 2014 for Peaches Ltd and Cream Ltd is as follows: \[\begin{array} { | l | r | r } \hline & \text { Peaches Ltd } & \text { Cream Ltd } \\ \hline \text { Operating profit after tax } & 560000 & 230000 \\ \hline \text { Dividends proposed } & 50000 & 40000 \\ \hline \end{array}\] Neither dividend had been paid at the end of the period.There were no other intragroup transactions during the period.What is the non-controlling interest in Peaches Ltd and Cream Ltd as at 30 June 2014?

A) $\begin{array}{|l|r|r|r} \hline & \text { Peaches Ltd } & \text { Cream Ltd } \\ \hline \text { Operating profit } & 53200 & 85100 \\ \hline \text { Retained earnings } & 95000 & 150000 \\ \hline \text { Dividends } & (5000) & (12000) \\ \hline \text { Share capital } & 134000 & 300000 \\ \hline \end{array}$ B) $\begin{array}{|l|r|r|r} \hline & \text { Peaches Ltd } & \text { Cream Ltd } \\ \hline \text { Operating profit } & 56000 & 6900 \\ \hline \text { Retained earnings } & 95000 & 185000 \\ \hline \text { Dividends } & (5000) & (12000) \\ \hline \text { Share capital } & 134000 & 370000 \\ \hline \end{array}$ C) \[\begin{array} { | l | r | r | } \hline & \text { Peaches Ltd } & \text { Cream Ltd } \\ \hline \text { Operating profit } & 50810 & 83250 \\ \hline \text { Retained earnings } & 95000 & 185000 \\ \hline \text { Dividends } & ( 5000 ) & ( 12000 ) \\ \hline \text { Share capital } & 134000 & 37000 \\ \hline \end{array}\] D) \[\begin{array} { | l | r | r | } \hline & \text { Peaches Ltd } & \text { Cream Ltd } \\ \hline \text { Operating profit } & 53610 & 67500 \\ \hline \text { Retained earnings } & 95000 & 150000 \\ \hline \text { Dividends } & ( 5000 ) & ( 12000 ) \\ \hline \text { Share capital } & 134000 & 30000 \\ \hline \end{array}\] A) $\begin{array}{|l|r|r|r} \hline & \text { Peaches Ltd } & \text { Cream Ltd } \\ \hline \text { Operating profit } & 53200 & 85100 \\ \hline \text { Retained earnings } & 95000 & 150000 \\ \hline \text { Dividends } & (5000) & (12000) \\ \hline \text { Share capital } & 134000 & 300000 \\ \hline \end{array}$ B) $\begin{array}{|l|r|r|r} \hline & \text { Peaches Ltd } & \text { Cream Ltd } \\ \hline \text { Operating profit } & 56000 & 6900 \\ \hline \text { Retained earnings } & 95000 & 185000 \\ \hline \text { Dividends } & (5000) & (12000) \\ \hline \text { Share capital } & 134000 & 370000 \\ \hline \end{array}$ C) \[\begin{array} { | l | r | r | } \hline & \text { Peaches Ltd } & \text { Cream Ltd } \\ \hline \text { Operating profit } & 50810 & 83250 \\ \hline \text { Retained earnings } & 95000 & 185000 \\ \hline \text { Dividends } & ( 5000 ) & ( 12000 ) \\ \hline \text { Share capital } & 134000 & 37000 \\ \hline \end{array}\] D) \[\begin{array} { | l | r | r | } \hline & \text { Peaches Ltd } & \text { Cream Ltd } \\ \hline \text { Operating profit } & 53610 & 67500 \\ \hline \text { Retained earnings } & 95000 & 150000 \\ \hline \text { Dividends } & ( 5000 ) & ( 12000 ) \\ \hline \text { Share capital } & 134000 & 30000 \\ \hline \end{array}\]

Exam 23: Further Consolidation Issues III: Accounting for Indirect Ownership Interest

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?

(Multiple Choice)

5.0/5

(45)

Question 21

Discuss how it is possible for one entity to control another entity without any direct ownership interest.

(Essay)

4.9/5

(48)

Question 22

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?

(Multiple Choice)

4.8/5

(35)

Question 23

The following is an extract from the non-controlling interest memorandum,used to calculate non-controlling interests.Both subsidiaries became members of the economic entity at the same time at the start of this current period. Barbie Ltd Ken Ltd Total NCl Non-controlling interest in profit after tax Profit as shown in respective entity's reports 12000 16000 less: Dividend received from entity within group (2500) Profit contributed to the economic entity 9500 16000 Non-controlling interest 3800 9920 13720 Non-controlling interest in opening retained earings Opening retained earnings 15000 24000 Non-controlling interest 6000 9600 15600 What is the parent's indirect equity (percentage)interest in Barbie Limited?

(Multiple Choice)

4.7/5

(30)

Question 24

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: Han Ltd Leia Ltd Share capital 2000000 1600000 Retained earnings 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)?

(Multiple Choice)

4.9/5

(29)

Question 25

Illustrate with the use of a diagram with hypothetical ownership interests,a structure where a parent entity has indirect ownership in a subsidiary.Demonstrate using the hypothetical percentages in proposed diagram,how direct and indirect ownership of parent and non-controlling interests are calculated.

(Essay)

4.9/5

(33)

Question 26

A Plc owns 85% of the issued capital of B Plc and B Plc owns 90% of the issued capital of C Plc.What is the total outside equity interest in C Plc?

(Multiple Choice)

4.8/5

(38)

Question 27

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: Han Ltd Leia Ltd Share capital 2000000 1600000 Retained earnings 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)?

(Multiple Choice)

4.8/5

(34)

Question 28

Rose Ltd acquired a 75 per cent interest in Daisy Ltd on 1 July 2014 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: Daisy Ltd Tulip Ltd Share capital 900000 860000 Retained earnings 985000 900000 Goodwill has been determined not to have been impaired.Using the multiple entity consolidation approach,what would the analysis of direct and indirect interests in the subsidiaries and the elimination entries be for the consolidation for 30 June 2015?

(Multiple Choice)

4.9/5

(41)

Question 29

Describe a non-sequential acquisition and explain the process of consolidation for this type of business combination.

(Essay)

4.7/5

(35)

Question 30

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?

(Multiple Choice)

4.9/5

(43)

Question 31

Rose Ltd acquired a 75 per cent interest in Daisy Ltd on 1 July 2014 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: Daisy Ltd Tulip Ltd Share capital 900000 86000 Retained earnings 985000 900000 Goodwill has been determined not to have been impaired.Information for the period ended 30 June 2015 for Daisy and Tulip is as follows: Daisy Ltd Tulip Ltd Operating profit after tax 30000 20000 Dividends proposed 20000 10000 Neither dividend had been paid at the end of the period.There were no other intragroup transactions during the period.What is the non-controlling interest in Daisy and Tulip as at 30 June 2015?

(Multiple Choice)

4.7/5

(39)

Question 32

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.

(True/False)

4.8/5

(48)

Question 33

The non-controlling interest in post-acquisition capital and reserves will be based on direct non-controlling interest.

(True/False)

4.7/5

(42)

Question 34

Describe the two multiple subsidiary acquisition types,based on the order of acquisition.

(Essay)

4.8/5

(32)

Question 35

The following diagram represents the ownership of issued share capital of the companies in a group. What is the indirect parent entity interest and indirect non-controlling interest in D Ltd,respectively?

(Multiple Choice)

4.8/5

(42)

Question 36

Summarise the calculations for recognising non-controlling interests,where both direct and indirect interests exist,in relation to: (a)pre-acquisition share capital and reserves; (b)post-acquisition profits; and (c)post-acquisition movements in reserves.

(Essay)

4.9/5

(37)

Question 37

The following acquisition analysis relates to a non-sequential acquisition,at the time that Ginger Ltd acquires a controlling interest (acquiring 60 per cent)in Posh Ltd.Posh Ltd had previously acquitted 75 per cent of Scary Ltd. Posh Ltd Ginger Ltd interest Share capital at acquisition date 280000 (a) Retained earnings at acquisition date 124000 (b) Share of post-acquisition earnings of Scary Ltd attributable to Posh 90000 (c) Ltd prior to Ginger's acquisition of Posh Ltd Increase in retained earnings of Scary Ltd ((d) -56000) What are the figures represented by (c)and (d)in the table above?

(Multiple Choice)

4.8/5

(34)

Question 38

Pudding Ltd acquired a 90 per cent interest in Peaches Ltd on 1 July 2013 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: Peaches Ltd Cream Ltd Share capital 1340000 100000 Retained earnings 500000 2290000 1500000 Goodwill has been determined not to have been impaired.Information for the period ended 30 June 2014 for Peaches Ltd and Cream Ltd is as follows: Peaches Ltd Cream Ltd Operating profit after tax 560000 230000 Dividends proposed 50000 40000 Neither dividend had been paid at the end of the period.There were no other intragroup transactions during the period.What is the non-controlling interest in Peaches Ltd and Cream Ltd as at 30 June 2014?

(Multiple Choice)

4.8/5

(33)

Question 39

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.

(True/False)

4.8/5

(33)

Question 40

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?

Discuss how it is possible for one entity to control another entity without any direct ownership interest.

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 Plc owns 85% of the issued capital of B Plc and B Plc owns 90% of the issued capital of C Plc.What is the total outside equity interest in C Plc?

Describe a non-sequential acquisition and explain the process of consolidation for this type of business combination.

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?

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.

The non-controlling interest in post-acquisition capital and reserves will be based on direct non-controlling interest.

Describe the two multiple subsidiary acquisition types,based on the order of acquisition.

The following diagram represents the ownership of issued share capital of the companies in a group. What is the indirect parent entity interest and indirect non-controlling interest in D Ltd,respectively?

Summarise the calculations for recognising non-controlling interests,where both direct and indirect interests exist,in relation to: (a)pre-acquisition share capital and reserves; (b)post-acquisition profits; and (c)post-acquisition movements in reserves.

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.

An Overview of the International External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Financial Accounting

An Overview of Accounting for Assets

Depreciation of Property, Plant and Equipment

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

An Overview of Accounting for Liabilities

Accounting for Leases

Share Capital, Reserves and Share Options Employee Bonus Schemes

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Income Taxes

The Statement of Cash Flows

Events Occurring After the Reporting Date

Related-Party Disclosures

Earnings Per Share

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

Filters