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8216 Cpar Consolidated FS
8216 Cpar Consolidated FS
8216 Cpar Consolidated FS
3. Under IFRS 10, parent corporation is the entity that controls one or more entities.
How does IFRS 10 define control?
4. Under IFRS 10, it refers to the term used to describe the ownership of the largest
block of voting rights in a situation where the remaining rights are widely
dispersed even if it is less than the majority interest thereby requiringthe holder of
such interest to prepare consolidated financial statements?
a. De jure control
b. De facto control
c. Legal control
d. Nominal control
5. Parent corporation has 51% interest in listed entity Sub Inc. Sub is highly-
leveraged and started making losses. Parent decided to sell 2% to an investment
bank. The post-sale structure shows that Parent Corp. has only 49% interest,
investment bank has 2% interest and the remaining 49% interest owned by
many shareholders other than the investment bank each with less than 1% pf
votes and there is no arrangement among them to vote collectively. Upon the
sale, Parent corporation can easily reacquire controlling interest in Sub by buying
shares in the market and expects to continue managing Sub through election of
directors in Sub’s general meeting. Sub Inc. is listed with deep and liquid market
for shares. Is the Parent still required to consolidated Sub Inc. in its consolidated
financial statements?
a. Yes because X controls the investee’s relevant activity that is managing the
receivables upon default which significantly affects the investee’s returns.
b. No because there is no statement as regards to majority ownership of stocks.
c. Yes but only if X owns 51% or more of voting stocks of investee.
d. No because there is no link of power over the investee to the exposure/right
to variable returns of investment.
7. How shall the parent corporation present the Non-controlling Interest (NCI) in the
Consolidated Statement of Financial Position?
8. Which of the following income items shall not affect both CNI to Parent
(CONSORE) and NCINI/(NCINAS)?
a. Amortization of difference between the fair value and book value of the assets
and liabilities of the subsidiary.
b. Unrealized/realized income/expense arising from upstream transactions or
from subsidiary to parent.
c. Impairment loss of goodwill from business combination initially measured
using fair value of NCI.
d. Dividend income of parent coming from subsidiary.
11. Which of the following statements concerning the requirement of IAS 27 for
preparation of Separate Financial Statements is incorrect?
12. When the parent corporation elects to account its investments in subsidiaries,
associates or jointly controlled entities in its separate financial statements using
cost model or fair value model, how shall it recognize its dividends from a
subsidiary, joint venture or associate?
13. When the parent corporation elects to account its investments in subsidiaries,
associates or jointly controlled entities in its separate financial statements using
equity method, how shall it recognize its dividends from a subsidiary, joint
venture or associate?
1. How much is the non-controlling interest in net assets on December 31, 2016?
a. 871,005
b. 763,455
c. 745,455
d. 731,505
The following data summarized the results of their financial operations for the year
ended December 31, 2018:
GV Company DL Company
Sales 3,850,000 1,680,000
Gross Profit 1,904,000 504,000
Operating Expenses 770,000 280,000
Ending Inventories 336,000 280,000
Dividend Received from affiliate 126,000 -
Dividend Received from nonaffiliate - 70,000
1. What are the consolidated sales and consolidated cost of goods sold at the end
of 2018?
a. 236,140
b. 232,500
c. 223,500
d. 263,140
On September 1, 2016, Benz Inc., purchased a piece of land costing P3,500,000 from
Fever Company for P5,250,000. On November 2, 2017, the buying affiliate sold this
land to Jam Co. for P7,500,000. On the other hand, on May 1, 2017, Benz Inc., sold a
machinery with a carrying value of P430,000 and remaining life of 4 years to Fever
Company for P190,000. Benz Inc. declared dividends on 2017 in the amount of
P600,000. Separate Statement of Comprehensive Income for the two companies for the
year 2017 follow:
a. 11,651,250
b. 5,148,750
c. 11,948,750
d. 3,351,250
a. 11,768,750
b. 9,720,750
c. 10,018,750
d. 11,118,750
3. Consolidated Operating Expenses
a. 4,340,000
b. 4,140,000
c. 4,380,000
d. 4,300,000
Techno Duo
Sales P9,000,000 P5,400,000
Gain on sale of equipment 180,000 --------------
Cost of goods sold (3,600,000) (2,340,000)
Depreciation expense (900,000) (540,000)
Other expenses (1,440,000) (720,000)
Income from operations P3,240,000 P1,800,000
There was an upstream sale of equipment with a book value of P720,000 for
P1,170,000 on January 2, 2015. At the time of intercompany sale, the equipment had a
remaining useful life of 5 years. Techno uses straight-line depreciation. The buying
affiliate used the equipment until December 31, 2017, at which time it was sold to
Genex for P648,000.
What is the amount of net profit attributable to non-controlling interests for 2017?
a. P517,500
b. 472,500
c. 450,000
d. 562,500
In the December 31, 2016 consolidated statement of financial position, how much is the
consolidated net income attributable to the controlling interest?
a. 1,606,000
b. 2,326,000
c. 2,366,000
d. 2,406,000
PROBLEM 7: Superior company owns 60% of Uptown Corporation, which in turn owns
80% of Newton Company. Uptown exercises control over Newton and Superior
exercises control over Uptown. The following information is available:
a. 5,939,400
b. 8,893,600
c. 5,834,400
d. 5,901,600
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