Exam 28: Consolidation: Intragroup Transactions

When an entity sells during the current period a non-depreciable non-current asset at a profit to another entity within the same group the following adjustment is necessary on consolidation at the end of the period:

The adjustments included in the consolidation worksheet are:

If a dividend is paid out of profits that are earned after the acquisition date, it is known as:

A parent entity made an advance of $50 000 to its subsidiary. The parent charges interest of $3 000 on this advance. The consolidation adjustment to eliminate the advance is:

Which of the following statements is incorrect:

Which of the following statements is incorrect:

When eliminating an intragroup service which of the followings would appear in the consolidation worksheet entry?

A parent entity group sold a depreciable non-current asset to a subsidiary entity for $2 800. The asset originally cost $3 000 when acquired from an external party and at the date of intragroup sale the accumulated depreciation was $500. The amount of the unrealised gain on the intragroup sale to be eliminated is:

During the current period, a subsidiary entity sold inventories to a parent entity for $30 000. The inventories had previously cost the subsidiary entity $24 000. By reporting date the parent entity had sold 75% of inventories to a party outside the group. The company tax rate is 30%. The adjustment entry in the consolidation worksheet at reporting date is:

Jameson purchased goods from its subsidiary for $10 000. The goods cost the subsidiary $6 000. The company rate of tax is 30%. Which of the following consolidation adjustment entries is correct?

Which of the following statements is incorrect:

The changes in accounting standards since year 2008 require:

In May 2017, a parent entity sold inventories to a subsidiary entity for $30 000. The inventories had previously cost the parent entity $24 000. The entire inventories are still held by the subsidiary at reporting date, 30 June 2017. Ignoring tax effects, the adjustment entry in the consolidation worksheet at reporting date is:

During the year ended 30 June 2017, a subsidiary entity sold inventories to a parent entity for $30 000. The inventories had previously cost the subsidiary entity $24 000. By 30 June 2017 the parent entity had sold 75% of the inventories to a party outside the group. The company tax rate is 30%. The adjustment entry in the consolidation worksheet at 30 June 2018 is:

Winter Limited paid during the period an interim dividend of $5 000 to its parent entity. If the tax rate is 30%, what would be the adjustment made in the consolidation entry to record the tax effect of this transaction at the end of the period?

Janus Limited, a subsidiary entity, sold during the current period a non-current asset at a profit to its parent entity. The adjustment necessary on consolidation to reflect the tax effect of this transaction will result in an:

Andronico Limited provided an advance of $500 000 to its subsidiary Galactico Limited. On consolidation, the following adjustment is needed in relation to this intragroup advance:

Which of the following questions is not a key question to consider when determining the appropriate consolidation adjustment entries:

The tax effect of eliminating the unrealised profit from an intragroup sale of inventories and adjusting the value of the inventories on hand is recognised as:

A Ltd sells to its subsidiary, J Ltd, an item of inventories on 1 January 2017 for $6 000. The item cost A Ltd $3 000 earlier in the current year. J Ltd intends to use the item as plant with a useful life of 10 years, and no estimated salvage value. A straight-line depreciation rate of 10% p.a. is applicable. The tax rate is 30%. The worksheet entry for the year ended 30 June 2017 would include the following adjustment: