Scenario: On 1 January 20X4, Quantum Robotics Co acquired 80% of the equity share capital of Nano Assembly Ltd. Consideration consisted of $500,000 cash paid immediately and a further $200,000 payable on 1 January 20X6 (discount rate 10%, PV = $165,289). At acquisition, Nano Assembly's share capital was $100,000 and retained earnings were $350,000. The fair value of the non-controlling interest (NCI) at acquisition was $120,000. A fair value exercise at acquisition identified plant with a fair value $40,000 above its carrying amount (remaining life 4 years). During the year, Nano Assembly sold components to Quantum Robotics for $80,000, at a mark-up of 25%. Half of these remained in inventory at 31 December 20X4. At 31 December 20X4, Nano Assembly's retained earnings were $450,000.
Question: What is the total fair value of the consideration transferred by Quantum Robotics Co for the acquisition? (Enter numbers only)
ACCA · Question 48 · Preparing Simple Consolidated Financial Statements
Scenario: On 1 January 20X4, Quantum Robotics Co acquired 80% of the equity share capital of Nano Assembly Ltd. Consideration consisted of $500,000 cash paid immediately and a further $200,000 payable on 1 January 20X6 (discount rate 10%, PV = $165,289). At acquisition, Nano Assembly's share capital was $100,000 and retained earnings were $350,000. The fair value of the non-controlling interest (NCI) at acquisition was $120,000. A fair value exercise at acquisition identified plant with a fair value $40,000 above its carrying amount (remaining life 4 years). During the year, Nano Assembly sold components to Quantum Robotics for $80,000, at a mark-up of 25%. Half of these remained in inventory at 31 December 20X4. At 31 December 20X4, Nano Assembly's retained earnings were $450,000.
Question: How is the extra depreciation of $10,000 treated in the consolidated Statement of Profit or Loss?
Answer options:
Deducted from consolidated Revenue.
Added to consolidated Operating Expenses (or Cost of Sales, depending on the asset's use).
Ignored, as it only affects the Statement of Financial Position.
Deducted from consolidated Operating Expenses.
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