GUST-Advanced-accounting-Chapter02-test-bank-part1

1. Use the following information to answer questions 1 : 8.

On 1 January 2016 P Limited acquired 60% of the equity shares of S Limited. The statement of financial position (balance sheet) is shown below (all figures in the question are in thousands of USD)

	P Limited	S Limited
Non-current Assets
Plant Property and Equipment	110	18
Investment in S Limited	36
Current assets	120	38
Total Assets	266	56
Current liabilities	30	5
Long term loan	31	15
Share Capital ($1 shares)	170	24
Retained Earnings	35	12
Total Liabilities and Equity	266	56

All assets and liabilities of S Limited were recorded at fair value at the acquisition date. Non-controlling interest are valued at their proportionate share of the identifiable net assets of S Limited.

The goodwill associated to this acquisition is:

$36

$18

$24

None of the answers

$12

2. Use the following information to answer questions 1 : 8.

On 1 January 2016 P Limited acquired 60% of the equity shares of S Limited. The statement of financial position (balance sheet) is shown below (all figures in the question are in thousands of USD)

	P Limited	S Limited
Non-current Assets
Plant Property and Equipment	110	18
Investment in S Limited	36
Current assets	120	38
Total Assets	266	56
Current liabilities	30	5
Long term loan	31	15
Share Capital ($1 shares)	170	24
Retained Earnings	35	12
Total Liabilities and Equity	266	56

All assets and liabilities of S Limited were recorded at fair value at the acquisition date. Non-controlling interest are valued at their proportionate share of the identifiable net assets of S Limited.

The group figure for Non-controlling interest at 1 January 2016 is?

$18

$24

$12

None of the answers

$36

3. Use the following information to answer questions 1 : 8.

On 1 January 2016 P Limited acquired 60% of the equity shares of S Limited. The statement of financial position (balance sheet) is shown below (all figures in the question are in thousands of USD)

	P Limited	S Limited
Non-current Assets
Plant Property and Equipment	110	18
Investment in S Limited	36
Current assets	120	38
Total Assets	266	56
Current liabilities	30	5
Long term loan	31	15
Share Capital ($1 shares)	170	24
Retained Earnings	35	12
Total Liabilities and Equity	266	56

All assets and liabilities of S Limited were recorded at fair value at the acquisition date. Non-controlling interest are valued at their proportionate share of the identifiable net assets of S Limited.

The group figure for plant, property and equipment at 1 January 2016 is?

$96

None of the answers

$128

$110

$118

4. Use the following information to answer questions 1 : 8.

On 1 January 2016 P Limited acquired 60% of the equity shares of S Limited. The statement of financial position (balance sheet) is shown below (all figures in the question are in thousands of USD)

	P Limited	S Limited
Non-current Assets
Plant Property and Equipment	110	18
Investment in S Limited	36
Current assets	120	38
Total Assets	266	56
Current liabilities	30	5
Long term loan	31	15
Share Capital ($1 shares)	170	24
Retained Earnings	35	12
Total Liabilities and Equity	266	56

All assets and liabilities of S Limited were recorded at fair value at the acquisition date. Non-controlling interest are valued at their proportionate share of the identifiable net assets of S Limited.

The group figure for share capital at 1 January 2016 is?

$194

None of the answers

$170

$128

$205

5. Use the following information to answer questions 1 : 8.

On 1 January 2016 P Limited acquired 60% of the equity shares of S Limited. The statement of financial position (balance sheet) is shown below (all figures in the question are in thousands of USD)

	P Limited	S Limited
Non-current Assets
Plant Property and Equipment	110	18
Investment in S Limited	36
Current assets	120	38
Total Assets	266	56
Current liabilities	30	5
Long term loan	31	15
Share Capital ($1 shares)	170	24
Retained Earnings	35	12
Total Liabilities and Equity	266	56

All assets and liabilities of S Limited were recorded at fair value at the acquisition date. Non-controlling interest are valued at their proportionate share of the identifiable net assets of S Limited.

The group figure for investment at 1 January 2016 is?

$36

$16

None of the answers

$0

$72

6. Use the following information to answer questions 1 : 8.

On 1 January 2016 P Limited acquired 60% of the equity shares of S Limited. The statement of financial position (balance sheet) is shown below (all figures in the question are in thousands of USD)

	P Limited	S Limited
Non-current Assets
Plant Property and Equipment	110	18
Investment in S Limited	36
Current assets	120	38
Total Assets	266	56
Current liabilities	30	5
Long term loan	31	15
Share Capital ($1 shares)	170	24
Retained Earnings	35	12
Total Liabilities and Equity	266	56

All assets and liabilities of S Limited were recorded at fair value at the acquisition date. Non-controlling interest are valued at their proportionate share of the identifiable net assets of S Limited.

The group figure for total assets at 1 January 2016 is?

$346

$310

None of the answers

$322

$266

7. Use the following information to answer questions 1 : 8.

On 1 January 2016 P Limited acquired 60% of the equity shares of S Limited. The statement of financial position (balance sheet) is shown below (all figures in the question are in thousands of USD)

	P Limited	S Limited
Non-current Assets
Plant Property and Equipment	110	18
Investment in S Limited	36
Current assets	120	38
Total Assets	266	56
Current liabilities	30	5
Long term loan	31	15
Share Capital ($1 shares)	170	24
Retained Earnings	35	12
Total Liabilities and Equity	266	56

All assets and liabilities of S Limited were recorded at fair value at the acquisition date. Non-controlling interest are valued at their proportionate share of the identifiable net assets of S Limited.

The journal entry to record the acquisition at 1 January 2016 include.

Credit to share of profit of associate for $24.

None of the answers

Debit to investment account for $36.

Debit to goodwill account for $24

Debit to cash account for $36.

8. Use the following information to answer questions 1 : 8.

On 1 January 2016 P Limited acquired 60% of the equity shares of S Limited. The statement of financial position (balance sheet) is shown below (all figures in the question are in thousands of USD)

	P Limited	S Limited
Non-current Assets
Plant Property and Equipment	110	18
Investment in S Limited	36
Current assets	120	38
Total Assets	266	56
Current liabilities	30	5
Long term loan	31	15
Share Capital ($1 shares)	170	24
Retained Earnings	35	12
Total Liabilities and Equity	266	56

All assets and liabilities of S Limited were recorded at fair value at the acquisition date. Non-controlling interest are valued at their proportionate share of the identifiable net assets of S Limited.

The worksheet entry at 1 January 2016 include.

Debit to investment account for $36.

None of the answers

Credit to share of profit of associate for $24.

Debit to cash account for $36.

Debit to goodwill account for $24

9. H owns 70% of the voting shares of S1 which in turn owns 30% of S3. H also owns 60% of S2 which in turn owns 40% of S3.

Which of the following statement is true regarding S3?

None of the answers

S3 is a subsidiary to H and is considered where controlling interest is 70% and non-controlling interest is 30%

S3 is a subsidiary to H and is considered where controlling interest is 45% and non-controlling interest is 30%

S3 is not a subsidiary to H. H has no control over S3 owing less than majority of shares.

S3 is not a subsidiary to H as control require direct ownership of more than 50% of the voting shares of the investee.

10. N owns 75% of the voting shares of D1 which in turn owns 30% of D3. N also owns 22.5% of D3.

Which of the following statement is true regarding D3?

S3 is a subsidiary to N and is considered where controlling interest is 52.5% and non-controlling interest is 47.5%

S3 is a subsidiary to N. as control require direct ownership of more than 50% of the voting shares of the investee.

S3 is not a subsidiary to N. as N has no control over D3 owing less than majority of shares.

S3 is a subsidiary to N and is considered where controlling interest is 70% and non-controlling interest is 30%

None of the answers

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