QUIZ

Consolidated Financial Statement

(Part 4)

TEST I
1. A_________________________ arises when the parent obtains control over another
entity indirectly through its direct holdings over another entity.
2. _________________ is where a parent`s subsidiary has its own subsidiary.
3. _________________ is where the parent and the subsidiary together hold a controlling
interest in another entity.
4. _________________ is the date the acquirer obtains control of the acquiree.
5. __________________ is where the fair value adjustments to the subsidiary`s net
identifiable assets are directly recorded in the subsidiary`s books
Complex Group Structure could be:
6.
7.
Investment in subsidiary can be measured either:
8.
9.
10.

TEST II
1. On January 1, 20x5, S1 acquires 60% interest in S2. On January 1, 20x6, P acquires 80%
interest in S1. What is the acquisition date?
A. January 1, 20x5 for S1 only
B. January 1, 20x6 for S2 only
C. January 1, 20x6 for both S1 & S2
2. P acquires 80% interest in S1 on January 1, 20x4. P acquires 25% interest in S2 on
January 1, 20x5. S1 acquires 30% interest in S2 on January 1, 20x6. What is the
acquisition date?
A. January 1, 20x4 for S1 only
B. January 1, 20x6 for S2 only
C. a and b
3. S1 acquires 30% interest in S2 on January 1, 20x4. P acquires 25% interest in S2 on
January 1, 20x5. P acquires 80% interest in S1 on January 1, 20x6. What is the
acquisition date?
A. January 1, 20x6 for S1 only
B. January 1, 20x5 for S2 only
C. January 1, 20x6 for both S1 and S2
Use the following information for the next seven questions:
 QUIZ
Consolidated Financial Statement
(Part 4)

The following transactions occurred on January 1, 20x4:

 P acquires 80% in S1 for P 500,000 when the retained earnings of S1 were P 120,000.
NCI in S1 has a fair value of P 100,000.
 S1 acquired 60% interest in S2 for P 300,000 when the retained earnings of s2 were P
40,000. NCI in S2 (direct and indirect) has a fair value of P 160,000.
The carrying amount of the net identifiable assets of S1 and S2 approximate their fair values on
January 1, 20x4. The group determined on December 31, 20x4 that goodwill has been impaired
by 20%. There have been no changes in the share capitals of S1 and S2 during the year.
A summary of the individual financial statements of the entities is shown below:
Statement of Financial Position
As at December 31, 20x4
______________________________________________________________________________
_______
P S1
S2
______________________________________________________________________________
_______

Investment in subsidiary 400,000 200,000

-
Other assets 800,000 480,000
320,000
______________________________________________________________________________
_______
Total assets 1,200,000 680,000
320,000
______________________________________________________________________________
_______

______________________________________________________________________________
_______
Liabilities 120,000 152,000
8,000
Share Capital 480,000 320,000
200,000
Retained Earnings 600,000 208,000
112,000
______________________________________________________________________________
_______
 QUIZ
Consolidated Financial Statement
(Part 4)
Total liabilities and equity 1,200,000 680,000
320,000
______________________________________________________________________________
_______

Statement of Profit or Loss

For the year ended December 31, 20x4
______________________________________________________________________________
____
Revenues 720,000 408,000
192,000
Expenses (400,000) (320,000)
(120,000)
______________________________________________________________________________
____
Profit 320,000 88,000
72,000
______________________________________________________________________________
____

4. How much is the goodwill as of December 31, 20x4?

a. 256,000 b. 112,000 c. 198,500
5. How much is the total NCI inn net assets as of December 31, 20x4?
a. 264,320 b. 232,000 c. 305,620
6. How much is the consolidated retained earnings as of December 31, 20x4?
a. 687, 680 b. 667,280 c. 664,000
7. How much is the consolidated profit or loss on 20x4?
a. 460,320 b. 446,000 c. 366,000
8. How much is the profit attributable to owners of parent and to NCI, respectively?
Owners of Parent NCI in S1 NCI in S2
a. 406,730 15,480 38,110
b. 384,000 11,200 20,800
c. 307,930 15,120 60,040
9. How much is the consolidated total assets as of December 31, 20x4?
a. 1,856,000 b. 1,690,000 c. 2,000,000
10. How much is the consolidated total equity as of December 31, 20x4?
a. 1,376,000 b. 1,234,000 c. 3,000,000