Exam 12: Completing the Balance Sheet

On 1 January 2016,Yu Ltd acquired 100 000 shares (30 per cent of the voting interest)in Ping Ltd for $900 000 cash.On 30 June 2016,Ping Ltd announced its earnings per share for the first six months of 2016 at $2.00 per share.On 20 November,Ping Ltd paid dividends to shareholders at $1.20 per share.On 31 December 2016,Ping Ltd announced its earnings per share for 2016 at $3.50 per share (i.e. ,$1.50 additional since 30 June). -If Yu Ltd used the equity basis,what would be the balance sheet value of its investment in Ping Ltd at 31 December 2016?

Which of the following are NOT eliminated in the preparation of consolidated financial statements?

On 1 January 2016,Sky-High Ltd acquired 100 000 shares (30 per cent of the voting interest)in Down Ltd for $600 000 cash.On 30 June 2016,Down Ltd announced its earnings per share for the first six months of 2016 at $1.50 per share.On 20 November,Down Ltd paid dividends to shareholders at $0.90 per share.On 31 December 2016,Down Ltd announced its earnings per share for 2016 at $2.80 per share (i.e. ,$1.30 additional since 30 June). - If Sky-High Ltd used the cost basis,which of the following accounting records would it make on 30 June 2016 in response to Down Ltd's earnings announcement?

On 1 January 2016,Sky-High Ltd acquired 100 000 shares (30 per cent of the voting interest)in Down Ltd for $600 000 cash.On 30 June 2016,Down Ltd announced its earnings per share for the first six months of 2016 at $1.50 per share.On 20 November,Down Ltd paid dividends to shareholders at $0.90 per share.On 31 December 2016,Down Ltd announced its earnings per share for 2016 at $2.80 per share (i.e. ,$1.30 additional since 30 June). -If Sky-High Ltd used the cost basis,what was the balance sheet value of investment in Down Ltd at 31 December 2016?

Investments appear on the balance sheet under the heading of:

Which of the following statements about the equity method is NOT true?

Gargantua Ltd paid $1 000 000 for 75 per cent of the voting shares of Dwarf Ltd,and evaluated Dwarf's assets to be worth $1 500 000 and its liabilities $300 000.What was the goodwill on consolidation at the date of acquisition?

Alby Ltd paid $1 800 000 for 80 per cent of the voting shares of Bunter Ltd and evaluated Bunter's assets to be worth $3 000 000 and its liabilities $800 000.What was the goodwill on consolidation at date of acquisition?

The entry to create a general reserve is usually:

Which of the following is NOT true with respect to bonus shares? They:

On 1 January 2016,Yu Ltd acquired 100 000 shares (30 per cent of the voting interest)in Ping Ltd for $900 000 cash.On 30 June 2016,Ping Ltd announced its earnings per share for the first six months of 2016 at $2.00 per share.On 20 November,Ping Ltd paid dividends to shareholders at $1.20 per share.On 31 December 2016,Ping Ltd announced its earnings per share for 2016 at $3.50 per share (i.e. ,$1.50 additional since 30 June). -If Yu Ltd used the equity basis,what dividend revenue would it record for year ended 31 December 2016 in respect of its investment in Ping Ltd?

On 1 January 2016,Sky-High Ltd acquired 100 000 shares (30 per cent of the voting interest)in Down Ltd for $600 000 cash.On 30 June 2016,Down Ltd announced its earnings per share for the first six months of 2016 at $1.50 per share.On 20 November,Down Ltd paid dividends to shareholders at $0.90 per share.On 31 December 2016,Down Ltd announced its earnings per share for 2016 at $2.80 per share (i.e. ,$1.30 additional since 30 June). - If Sky-High Ltd used the equity basis,what revenue would it record for the year ended 31 December 2016 in respect of its investment in Down Ltd?

Which of the following statements about bonus issues is NOT true?

A credit balance in retained profits:

Which of the following statements about a bonus issue is NOT true?

On 1 January 2016,Yu Ltd acquired 100 000 shares (30 per cent of the voting interest)in Ping Ltd for $900 000 cash.On 30 June 2016,Ping Ltd announced its earnings per share for the first six months of 2016 at $2.00 per share.On 20 November,Ping Ltd paid dividends to shareholders at $1.20 per share.On 31 December 2016,Ping Ltd announced its earnings per share for 2016 at $3.50 per share (i.e. ,$1.50 additional since 30 June). -If Yu Ltd used the equity method,what would have been the impact of Ping Ltd's 31 December 2016 earnings announcement?

When the cost method of accounting for long-term investment in shares is employed,the receipt of a dividend on those shares is recorded as a credit to:

XYZ buys a 24 per cent share in ABC for $80m.ABC's total net profit is $50m and it pays $4m in dividends to XYZ. -Using the equity method,the value of the investment in ABC would be recorded at year-end as:

XYZ buys a 24 per cent share in ABC for $80m.ABC's total net profit is $50m and it pays $4m in dividends to XYZ. -Using the equity method,the revenue recognised for this investment during the year would be:

R Limited has control over another entity,S Limited.R Limited is referred to as: