" "c

K"2& i'7"* Q,-;,*, *./*"0 4 A*"-,t"."7 TA-348

BUSINESS fOMAiilJNTIONS & F.S. CONSOLIDATION

! 24" which among the following conditions must be met for a parent companyJuolto be required to present
consolidated fi nancial statements?
I) Theparententityisitself awhollyorpartiattyownedsu-bsidipryof anothercompany. -{;t:4 i rytt ll!tf
lfit
Ii) The parent entity's debt or equity instruments ar(gbJ lradeg[in a public market. I 'r"1'S:5'
III) The parent entity dra:g!-tlgits iinancial statemenlffiIffi for ihe purpose of issuing any class of
instruments in a public market.
a. I only c. I and III
b. I and II d. I, II and III

! 25. A subsidiary is EXCLUDED from consolidation when

a. It is a foreign subsidiary
b. Its business activities are dissimilar from those of the other entities within the group
c. It operates under severe long-term restrictions which significantly impair its ability to
transfer funds to the parent
d. Control is intended to be temporary as the subsidiary is held exclusively with a view of
disposal within twelve months from acquisition

t 26. When an entity prepares separate FS, investments in subsidiaries, associates and jointly controlled
entities are accounted for either:
I) At cost
II) In accordance with PAS 39 (or PFRS I starting 1 Jan 2019)
IIl) Using the equity method based on PAS 28 (Investment. in Associates)
a. I and II c. II and III
b, I and III d. I, II and III
trl 27. When preparing consolidated financial statements, adjustments for-pre-acquigjtion equity and inter-
I entity transactions are recorded in the
a. Accounting records of reporting entity
b. Accounting records of parent entity
c. Accounting records of subsidiary
d. Consolidationworksheet
28. Consolidated financial statements u." p."purud using the following presentation method
- a' Gross
r- ', tl'.:
tt, x I
i,,al b. One-line
c. Line-bY-line
d. liquiOation method
,-'-i
t
il', i:tJr; Papa co. owns 75olo of son co. During the current year, papa co. sotd goods to son co. son co. sotd
all these goods to outside customers in the current year. For purposes of consolidating the FS of pappy
A
I\ and Son, how should this transacLion be adjusted? " ,),. ,^r ],r,1-^'
a. Sales and cost of sales should be reduced by 100o/o of the intercompany sales /" J ' 'v'" I I'.?1 \ , ,n
b. Salesandcostof salesshouldUereJuced by75o/ooftheintercompanysales
c. Profit should be reduced by 75o/o of the gross profit on intercompany sales - f\ I i!)i-rJ!,),r\
r
' ' l% d
i ,,',.,n',1-1,\
d. No adjustment is necessary .'"'1:tr {;tf
f
/\,
itl\ ,O Under PFRS 10, NoN-CONTROLLING TNTEREST means
1,,' a. The total equity of the combined group
c. The equity in the parent entity other than the portion owned by the subsidiary entity
d. The equity in the econornic entity other than that which can be attributed to the
subsidiary entity

31' Under PFRS 10, the non-controlling interests in the consolidated statement of financial position must be
presented
0 a. Within long-term liabilities
b. Within the parent shareholdrers'equity
c. Separately between the liabllity section and the equity section
d. Within equity but separate from the equity of the owners of the parent

32' For purposes of consolidating FS, the difference between the end of the reporting period of the
subsidiary and that of the parent should be NOT more than
a. One month
b. Two months
c. Three months
cJ. Six months