Question 1

A consolidation adjustment entry made to eliminate the intragroup sales of inventory at a profit would take the following form:

Accepted Answer

A)  DR Cost of Sales, CR Sales, CR Inventory 
B)  DR Sales, CR Cost of Sales, CR Inventory 
C)  DR Cash, DR Cost of Sales, CR Inventory 
D)  DR Inventory, CR Sales, CR Cash. 
A)  DR Cost of Sales, CR Sales, CR Inventory 
B)  DR Sales, CR Cost of Sales, CR Inventory 
C)  DR Cash, DR Cost of Sales, CR Inventory 
D)  DR Inventory, CR Sales, CR Cash.

Question 2

Angelo Limited sold inventory to its parent entity at a profit of $4 000. The inventory cost Angelo Limited $16 000. At the end of the reporting period the parent had sold 50% of the inventory to an external party. The consolidation adjustment entry (excluding tax effects) will eliminate unrealised profit amounting to:

Accepted Answer

A)  $2 000 
B)  $4 000 
C)  $12 000 
D)  $16 000 
A)  $2 000 
B)  $4 000 
C)  $12 000 
D)  $16 000

Question 3

A subsidiary sold inventory to a parent entity for $10 000. The inventory originally cost the subsidiary $6000. At the end of the reporting period the parent had sold 50% of the inventory to an external party. The company tax rate is 30%. The deferred tax item that is recognised on consolidation is:

Accepted Answer

A)  CR Deferred tax liability $1 200 
B)  CR Deferred tax liability $600 
C)  DR Deferred tax asset $1 200 
D)  DR Deferred tax asset $600. 
A)  CR Deferred tax liability $1 200 
B)  CR Deferred tax liability $600 
C)  DR Deferred tax asset $1 200 
D)  DR Deferred tax asset $600.

Question 4

Equipment costing $10 000 was sold by one entity within a group to another for $4000. Accumulated depreciation at date of sale was $3000. The consolidation entry will contain the following adjustment to the amount of the Equipment:

Accepted Answer

A)  Increase of $1000 
B)  Reduction of $1000 
C)  Increase of $3000 
D)  Reduction of $3000. 
A)  Increase of $1000 
B)  Reduction of $1000 
C)  Increase of $3000 
D)  Reduction of $3000.

Question 5

IFRS 10 Consolidated Financial Statements, requires that intragroup transactions be:

Accepted Answer

A)  eliminated on consolidation to the extent of the parent's interest in the subsidiary. 
B)  adjusted for in the books of the parent and subsidiary to the extent of the parent's interest in the subsidiary. 
C)  adjusted for in full in the books of the parent and subsidiary. 
D)  eliminated in full on consolidation. 
A)  eliminated on consolidation to the extent of the parent's interest in the subsidiary. 
B)  adjusted for in the books of the parent and subsidiary to the extent of the parent's interest in the subsidiary. 
C)  adjusted for in full in the books of the parent and subsidiary. 
D)  eliminated in full on consolidation.

Question 6

During the year ended 30 June 20X7 a subsidiary entity sold inventory to a parent entity for $30 000. The inventory had previously cost the subsidiary entity $24 000. By 30 June 20X7 the parent entity had sold 75% of the inventory to a party outside the group. The company tax rate is 30%. The adjustment entry in the consolidation worksheet at 30 June 20X8 is:

Accepted Answer

The answer of During the year ended 30 June 20X7...

Question 7

During the year ended 30 June 20X7, a parent entity rents a warehouse from a subsidiary entity for $100 000. The company tax rate is 30%. The consolidation adjustment entry needed at reporting date is:

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

A consolidation adjustment entry made to eliminate the intragroup sales of inventory at a profit would take the following form:

A subsidiary sold inventory to a parent entity for $10 000. The inventory originally cost the subsidiary $6000. At the end of the reporting period the parent had sold 50% of the inventory to an external party. The company tax rate is 30%. The deferred tax item that is recognised on consolidation is:

Equipment costing $10 000 was sold by one entity within a group to another for $4000. Accumulated depreciation at date of sale was $3000. The consolidation entry will contain the following adjustment to the amount of the Equipment:

IFRS 10 Consolidated Financial Statements, requires that intragroup transactions be:

During the year ended 30 June 20X7, a parent entity rents a warehouse from a subsidiary entity for $100 000. The company tax rate is 30%. The consolidation adjustment entry needed at reporting date is:

The Conceptual Framework of the Iasb

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

Share-Based Payments

Inventories

Employee Benefits

Property, Plant and Equipment

Leases

Intangible Assets

Business Combinations

Impairment of Assets

Accounting for Mineral Resources

Agriculture

Financial Statement Presentation

Statement of Cash Flows

Earnings Per Share

Operating Segments

Operating Segments

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Translation of the Financial Statements of Foreign Entities

Associates and Joint Ventures

Joint Arrangements

Filters

Exam 25: Consolidation: Intragroup Transactions

A consolidation adjustment entry made to eliminate the intragroup sales of inventory at a profit would take the following form:

Equipment costing $10 000 was sold by one entity within a group to another for $4000. Accumulated depreciation at date of sale was $3000. The consolidation entry will contain the following adjustment to the amount of the Equipment:

IFRS 10 Consolidated Financial Statements, requires that intragroup transactions be:

During the year ended 30 June 20X7, a parent entity rents a warehouse from a subsidiary entity for $100 000. The company tax rate is 30%. The consolidation adjustment entry needed at reporting date is:

The Conceptual Framework of the Iasb

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

Share-Based Payments

Inventories

Employee Benefits

Property, Plant and Equipment

Leases

Intangible Assets

Business Combinations

Impairment of Assets

Accounting for Mineral Resources

Agriculture

Financial Statement Presentation

Statement of Cash Flows

Earnings Per Share

Operating Segments

Operating Segments

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Translation of the Financial Statements of Foreign Entities

Associates and Joint Ventures

Joint Arrangements

Filters