Question 1

Prepare Alcor's Consolidated Balance Sheet as at December 31, 2016.

Accepted Answer

Alcor Inc.
Consolida

Question 2

Which of the following requirements is in line with the requirements set out in IAS 28 Investments in Associates and Joint Ventures for the treatment of unrealized gains and losses on non-monetary assets contributed to jointly controlled operations?

Accepted Answer

A)  The amounts are included in deferred gains or losses. 
B)  The gain or loss must be eliminated against the underlying assets as a contra account. 
C)  No gain or loss can be recognized until the asset is put into use and the asset is generating revenues. 
D) The gain or loss should be recorded immediately as other comprehensive income and transferred to operating income as the non-monetary asset is put into service. 
A)  The amounts are included in deferred gains or losses. 
B)  The gain or loss must be eliminated against the underlying assets as a contra account. 
C)  No gain or loss can be recognized until the asset is put into use and the asset is generating revenues. 
D) The gain or loss should be recorded immediately as other comprehensive income and transferred to operating income as the non-monetary asset is put into service.

Question 3

Globecorp International has six operating segments, the details of which are shown below. All figures shown are in thousands of dollars.
 $\begin{array}{|l|l|l|l|}
\hline \text { Operating Segment } & \text { Rerenues } & \text { Profits } & \text { Assets } \
\hline \mathrm{A} 01 & \$ 6,000 & \$ 1,050 & \$ 12,000 \
\hline \mathrm{B} 02 & \$ 4,800 & \$ 840 & \$ 10,500 \\hline \mathrm{C} 03 & \$ 3,600 & \$ 720 & \$ 7,500 \
\hline \mathrm{D} 04 & \$ 1,800 & \$ 330 & \$ 4,500 \
\hline \mathrm{E} 05 & \$ 2,550 & \$ 405 & \$ 4,200 \
\hline \mathrm{F} 06 & \$ 900 & \$ 135 & \$ 1,800 \
\hline
\end{array}$
-Using ONLY the assets test, determine which of the following segments require separate disclosures.

Accepted Answer

Total assets add up to $40,500

Question 4

What is the total amount of intercompany pre-tax profits in ending inventory?

Accepted Answer

A)  $3,000 
B)  $15,000 
C)  $20,000 
D) $30,000 
A)  $3,000 
B)  $15,000 
C)  $20,000 
D) $30,000

Question 5

The primary beneficiary of a variable interest enterprise:

Accepted Answer

A)  must include the assets, liabilities, and results of the variable interest enterprise in its consolidated financial statements. 
B)  can simply record income on a cash basis when dividends are received or income accrued. 
C)  only recognizes a gain or loss on the sale of its interest in the variable interest enterprise. 
D) only includes the results of the variable interest enterprise if it has in excess of 50% of the voting share capital of the variable interest enterprise. 
A)  must include the assets, liabilities, and results of the variable interest enterprise in its consolidated financial statements. 
B)  can simply record income on a cash basis when dividends are received or income accrued. 
C)  only recognizes a gain or loss on the sale of its interest in the variable interest enterprise. 
D) only includes the results of the variable interest enterprise if it has in excess of 50% of the voting share capital of the variable interest enterprise.

Question 6

Which of the following statements pertaining to any acquisition differential arising from a joint venture is correct?

Accepted Answer

A)  There can be no acquisition differential arising from the formation of a new joint Venture. 
B)  The acquisition differential arising from a newly formed joint venture is allocated across the venture's identifiable net assets. 
C)  The acquisition differential arising from a newly formed joint venture is immediately charged to the retained earnings of each venturer on a pro-rata basis. 
D) An acquisition differential may arise when a venturer increases its ownership percentage of a joint venture. 
A)  There can be no acquisition differential arising from the formation of a new joint Venture. 
B)  The acquisition differential arising from a newly formed joint venture is allocated across the venture's identifiable net assets. 
C)  The acquisition differential arising from a newly formed joint venture is immediately charged to the retained earnings of each venturer on a pro-rata basis. 
D) An acquisition differential may arise when a venturer increases its ownership percentage of a joint venture.

Question 7

What is the total amount of inventory that would appear on Seek's Consolidated Balance Sheet as at December 31, 2016?

Accepted Answer

A)  $129,000 
B)  $132,000 
C)  $312,000 
D) $360,000 
A)  $129,000 
B)  $132,000 
C)  $312,000 
D) $360,000

Question 8

Using only the Assets test, which of the following segment(s) would be reportable?

Accepted Answer

A)  A 
B)  A, B and C 
C)  A, B, C and D 
D) B, C and D 
A)  A 
B)  A, B and C 
C)  A, B, C and D 
D) B, C and D

Question 9

On December 31, 2017, XYZ Inc. has an account receivable of $2,000 for consulting fees it earned during the year. Consulting revenues are only taxable when collected. XYZ normally receives payment for the services rendered one month after the client is invoiced. Assuming a 20% tax rate, these revenues shall result in:

Accepted Answer

A)  a deferred tax liability of $2,000. 
B)  a deferred tax liability of $400. 
C)  a deferred tax asset of $400. 
D) a deferred tax asset of $2,000. 
A)  a deferred tax liability of $2,000. 
B)  a deferred tax liability of $400. 
C)  a deferred tax asset of $400. 
D) a deferred tax asset of $2,000.

Question 10

Which of the following statements is correct concerning reporting interests in joint ventures in compliance with the Accounting Standards for Private Enterprises (ASPE)?

Accepted Answer

A)  They must be reported using proportionate consolidation. 
B)  They must be reported using the equity method. 
C)  They must be reported using the cost method. 
D) They must be reported using the same method used for reporting interests in subsidiaries. 
A)  They must be reported using proportionate consolidation. 
B)  They must be reported using the equity method. 
C)  They must be reported using the cost method. 
D) They must be reported using the same method used for reporting interests in subsidiaries.

Question 11

The following balance sheets have been prepared on December 31, 2016 for Clarke Corp. and Jensen Inc.
Balance Sheets
Additional Information:
Clarke uses the cost method to account for its 50% interest in Jensen, which it acquired on January 1, 2013. On that date, Jensen's retained earnings were $20,000. The acquisition differential was fully amortized by the end of 2016.
Clarke sold Land to Jensen during 2015 and recorded a $15,000 gain on the sale. Clarke is still using this Land. Clarke's December 31, 2016 inventory contained a profit of $10,000 recorded by Jensen.
Jensen borrowed $20,000 from Clarke during 2016 interest-free. Jensen has not yet repaid any of its debt to Clarke.
Both companies are subject to a tax rate of 20%.
 $\begin{array}{|l|l|l|} 
\hline& \text { Clarke } & \text { Jensen } \
\hline & & \
\hline \text { Cash } & \$ 30,000 & \$ 20,000 \
\hline \text { Imwentory } & \$ 70,000 & \$ 30,000 \
\hline\\hline \text { Accounts Receivable } & \$ 180,000 & \$ 70,000 \
\hline \text { Imvestment in Jensen } & \$ 200,000 & \
\hline \text { Fixed Assets } & \$ 500,000 & \$ 90,000 \
\hline \text { Accumulated Depreciation } & \$ 280,000) & (\$ 30,000) \
\hline \text { Total Assets } & \$ 700,000 & \$ \mathbf{1 8 0 , 0 0 0} \\hline \text { Current Liabilities } & \$ 120,000 & \$ 60,000 \
\hline \text { Long-Term Debt } & \$ 400,000 & \$ 20,000 \
\hline \text { Common Shares } & \$ 90,000 & \$ 40,000 \
\hline \text { Retained Earnings } & \$ 90,000 & \$ 60,000 \
\hline \text { Liabifities and Equity } & \$ 700,000 & \$ 180,000 \
\hline
\end{array}$
-Prepare a Balance Sheet for Clarke on December 31, 2016 assuming that Clarke's Investment in Jensen is a joint venture investment and is reported using the equity method.

Accepted Answer

Clarke Inc,
Balance

Question 12

What is the total amount of intercompany receivables to be eliminated from the financial statements?

Accepted Answer

A)  Nil 
B)  $10,000 
C)  $40,000 
D) $50,000 
A)  Nil 
B)  $10,000 
C)  $40,000 
D) $50,000

Question 13

Using ALL of the applicable tests, which of the following segment(s) would be reportable?

Accepted Answer

A)  A 
B)  A, B and C 
C)  A, B, C and D 
D) B, C and D 
A)  A 
B)  A, B and C 
C)  A, B, C and D 
D) B, C and D

Question 14

What is Victor's portion of any unrealized gain or loss arising from the transfer of John's assets to Jinxtor on January 1, 2016?

Accepted Answer

A)  Nil 
B)  $90,000 
C)  $210,000 
D) $300,000 
A)  Nil 
B)  $90,000 
C)  $210,000 
D) $300,000

Question 15

When sales to a single customer amount to 10% or more of total revenues, disclosure of which of the following is not required under IFRS 8?

Accepted Answer

A)  The fact that sales to a single customer exceed 10% of total revenues. 
B)  The operating segment reporting the revenues. 
C)  The name of the customer. 
D) The total amount of revenue from each such customer. 
A)  The fact that sales to a single customer exceed 10% of total revenues. 
B)  The operating segment reporting the revenues. 
C)  The name of the customer. 
D) The total amount of revenue from each such customer.

Question 16

The following are the 2016 Income Statements of Roller Corp and Larmer Corp.
Income Statements
For the Year Ended December 31, 2016
Other Information:
During 2016 Larmer paid dividends of $24,000. Roller acquired its 30% stake in Larmer at a cost of $400,000 and uses the cost method to account for its investment.
The acquisition differential amortization schedule showed the following write-off for 2016:
 $\begin{array}{|l|l|l|} 
\hline& \text { Roler } & \text { Lamer } \
\hline & & \
\hline \text { Sales } & \$ 900,000 & \$ 360,000 \
\hline \text { Other Inc ome } & \$ 60,000 & \$ 21,000 \
\hline \text { Gain on Sale of Land } & & \$ 30,000 \
\hline\\hline \text { Cost of Sales } & \$ 420,000 & \$ 168,000 \
\hline \text { Operating Expenses } & \$ 150,000 & \$ 90,000 \
\hline \text { Depreciation Expens e } & \$ 30,000 & \$ 39,000 \
\hline \text { Income Tax } & \$ 120,000 & \$ 45,000 \
\hline\\hline \text { Net Income } & \$ 240,000 & \$ 69,000 \
\hline & & \
\hline
\end{array}$ During 2016, Larmer paid rent to Roller in the amount of $12,000, which Roller has recorded as other income.
In 2015, Roller sold Land to Larmer and recorded a profit of $10,000 on the sale. During 2016, Larmer sold the land to a third party.
Both companies are subject to a 40% tax rate.
Required:
Prepare Roller Inc's 2016 income statement, assuming that Larmer is considered to be a joint venture and is reported using the equity method.
 $$\begin{array} { | l | l | } 
\hline \text { Machinery and Equipment } & \$ 10,000 \
\hline \text { Goodwill Impairment Loss } & \$ 5,000 \
\hline \text { Long-Term Liabilities } & \$ \$ 3,000 ) \
\hline & \
\hline \text { Acquisition Differential Amortization - 2016 } & \$ 12,000 \
\hline &
\end{array}$$

Accepted Answer

Roller Inc.
Income S

Question 17

On December 31, 2017, XYZ Inc. has an account payable of $2,000 for operating expenses incurred during the year. These expenses are only tax deductible when paid. XYZ normally pays for its operating expenses one month after they are incurred. Assuming a 20% tax rate, these expenses shall result in:

Accepted Answer

A)  a deferred tax liability of $2,000. 
B)  a deferred tax liability of $400. 
C)  a deferred tax asset of $400. 
D) a deferred tax asset of $2,000. 
A)  a deferred tax liability of $2,000. 
B)  a deferred tax liability of $400. 
C)  a deferred tax asset of $400. 
D) a deferred tax asset of $2,000.

Question 18

How are intercompany transactions handled in a joint venture?

Accepted Answer

A)  They are ignored. 
B)  They are completely eliminated. 
C)  Only the venturer's share of any after tax profit is eliminated. 
D) Intercompany profits are treated as an adjustment to the acquisition differential. 
A)  They are ignored. 
B)  They are completely eliminated. 
C)  Only the venturer's share of any after tax profit is eliminated. 
D) Intercompany profits are treated as an adjustment to the acquisition differential.

Question 19

What is John's portion of any unrealized gain or loss arising from the transfer of John's assets to Jinxtor on January 1, 2016?

Accepted Answer

A)  Nil 
B)  $90,000 
C)  $210,000 
D) $300,000 
A)  Nil 
B)  $90,000 
C)  $210,000 
D) $300,000

Question 20

Which of the following is NOT used as a quantitative threshold to determine that an operating segment is reportable under IFRS 8 Operating Segments?

Accepted Answer

A)  10% of the combined revenues of all operating segments. 
B)  10% of the combined assets of all operating segments. 
C)  10% of all expenses are traced to the segment. 
D) 10% or more of the absolute amount of the combined reported profit of all operating segments that did not report a loss AND 10% or more of the absolute amount of the combined reported loss of all operating segments that did report a loss. 
A)  10% of the combined revenues of all operating segments. 
B)  10% of the combined assets of all operating segments. 
C)  10% of all expenses are traced to the segment. 
D) 10% or more of the absolute amount of the combined reported profit of all operating segments that did not report a loss AND 10% or more of the absolute amount of the combined reported loss of all operating segments that did report a loss.

Prepare Alcor's Consolidated Balance Sheet as at December 31, 2016.

Which of the following requirements is in line with the requirements set out in IAS 28 Investments in Associates and Joint Ventures for the treatment of unrealized gains and losses on non-monetary assets contributed to jointly controlled operations?

What is the total amount of intercompany pre-tax profits in ending inventory?

The primary beneficiary of a variable interest enterprise:

Which of the following statements pertaining to any acquisition differential arising from a joint venture is correct?

What is the total amount of inventory that would appear on Seek's Consolidated Balance Sheet as at December 31, 2016?

Using only the Assets test, which of the following segment(s) would be reportable?

Which of the following statements is correct concerning reporting interests in joint ventures in compliance with the Accounting Standards for Private Enterprises (ASPE)?

What is the total amount of intercompany receivables to be eliminated from the financial statements?

Using ALL of the applicable tests, which of the following segment(s) would be reportable?

What is Victor's portion of any unrealized gain or loss arising from the transfer of John's assets to Jinxtor on January 1, 2016?

When sales to a single customer amount to 10% or more of total revenues, disclosure of which of the following is not required under IFRS 8?

On December 31, 2017, XYZ Inc. has an account payable of $2,000 for operating expenses incurred during the year. These expenses are only tax deductible when paid. XYZ normally pays for its operating expenses one month after they are incurred. Assuming a 20% tax rate, these expenses shall result in:

How are intercompany transactions handled in a joint venture?

What is John's portion of any unrealized gain or loss arising from the transfer of John's assets to Jinxtor on January 1, 2016?

Which of the following is NOT used as a quantitative threshold to determine that an operating segment is reportable under IFRS 8 Operating Segments?

Conceptual and Case Analysis Frameworks for Financial Reporting

Investments in Equity Securities

Business Combinations

Consolidation of Non-Wholly Owned Subsidiaries

Consolidation Subsequent to Acquisition Date

Intercompany Inventory and Land Profits

A Intercompany Profits in Depreciable Assets B Intercompany Bondholdings

Consolidated Cash Flows and Changes in Ownership

Foreign Currency Transactions

Translation and Consolidation of Foreign Operations

Accounting for Not-For-Profit and Public Sector Organizations

Filters

Exam 9: Other Consolidation Reporting Issues

Prepare Alcor's Consolidated Balance Sheet as at December 31, 2016.

Which of the following requirements is in line with the requirements set out in IAS 28 Investments in Associates and Joint Ventures for the treatment of unrealized gains and losses on non-monetary assets contributed to jointly controlled operations?

What is the total amount of intercompany pre-tax profits in ending inventory?

The primary beneficiary of a variable interest enterprise:

Which of the following statements pertaining to any acquisition differential arising from a joint venture is correct?

What is the total amount of inventory that would appear on Seek's Consolidated Balance Sheet as at December 31, 2016?

Using only the Assets test, which of the following segment(s) would be reportable?

Which of the following statements is correct concerning reporting interests in joint ventures in compliance with the Accounting Standards for Private Enterprises (ASPE)?

What is the total amount of intercompany receivables to be eliminated from the financial statements?

Using ALL of the applicable tests, which of the following segment(s) would be reportable?

What is Victor's portion of any unrealized gain or loss arising from the transfer of John's assets to Jinxtor on January 1, 2016?

When sales to a single customer amount to 10% or more of total revenues, disclosure of which of the following is not required under IFRS 8?

On December 31, 2017, XYZ Inc. has an account payable of $2,000 for operating expenses incurred during the year. These expenses are only tax deductible when paid. XYZ normally pays for its operating expenses one month after they are incurred. Assuming a 20% tax rate, these expenses shall result in:

How are intercompany transactions handled in a joint venture?

What is John's portion of any unrealized gain or loss arising from the transfer of John's assets to Jinxtor on January 1, 2016?

Which of the following is NOT used as a quantitative threshold to determine that an operating segment is reportable under IFRS 8 Operating Segments?

Conceptual and Case Analysis Frameworks for Financial Reporting

Investments in Equity Securities

Business Combinations

Consolidation of Non-Wholly Owned Subsidiaries

Consolidation Subsequent to Acquisition Date

Intercompany Inventory and Land Profits

A Intercompany Profits in Depreciable Assets B Intercompany Bondholdings

Consolidated Cash Flows and Changes in Ownership

Foreign Currency Transactions

Translation and Consolidation of Foreign Operations

Accounting for Not-For-Profit and Public Sector Organizations

Filters