Preparing simple consolidated financial statements

**Section A** According to IFRS 10 Consolidated Financial Statements, which of the following is NOT a required element to establish 'control' over an investee?

**Section A** Alpha Co owns 30% of the ordinary shares of Beta Co and has representation on Beta Co's board of directors. Alpha Co does not have control over Beta Co. How should Alpha Co account for its investment in Beta Co in its consolidated financial statements?

**Section A** When preparing a consolidated statement of financial position, how are the pre-acquisition retained earnings of a subsidiary treated?

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* Calculate the Goodwill arising on the acquisition of Apex Robotics. (Enter numbers only)

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* What is the value of the Non-Controlling Interest at the date of acquisition?

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* Calculate the value of the Non-Controlling Interest at the year-end (31 December 20X5). (Enter numbers only)

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* What adjustment is required to Consolidated Revenue in respect of the intra-group trading?

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* What is the total amount of unrealized profit (Provision for Unrealized Profit - PUP) in inventory at the year-end? (Enter numbers only)

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* How is the Provision for Unrealized Profit (PUP) accounted for in the consolidated statement of financial position?

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* Calculate the Consolidated Retained Earnings at 31 December 20X5. (Enter numbers only)

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* If Apex Robotics had sold the goods to Zenith Heavy Industries (an upstream sale) instead of Zenith selling to Apex, how would the NCI calculation at year-end be affected?

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* At the year-end, Zenith's receivables include $50,000 owed by Apex. Apex's payables include $50,000 owed to Zenith. What is the correct consolidation adjustment for these balances?

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* Suppose Apex had sent a cheque for $10,000 to Zenith on 30 December 20X5 to clear part of its debt, but Zenith did not receive it until 3 January 20X6. How should this 'cash in transit' be treated in the consolidated financial statements at 31 December 20X5?

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* The fair value of Apex's net assets at acquisition ($2,000,000) included a property with a fair value $200,000 higher than its carrying amount in Apex's own books. How does this $200,000 fair value adjustment affect the consolidated financial statements at the date of acquisition?

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* Following on from the previous question, the property with the $200,000 fair value uplift had a remaining useful life of 20 years at the acquisition date. What is the additional depreciation charge required in the consolidated statement of profit or loss for the year ended 31 December 20X5? (Enter numbers only)

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* At the year-end, an impairment review was conducted, and it was determined that Goodwill had been impaired by $50,000. Because NCI is measured at fair value, how is this impairment allocated?

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* When preparing the consolidated statement of financial position, how are the Non-Current Assets of Zenith and Apex combined?

**Section B - Case 1: Group Consolidations** *Scenario: On 1 January 20X5, Zenith Heavy Industries acquired 80% of the equity share capital of Apex Robotics for $2,500,000. At the date of acquisition, the fair value of Apex's net assets was $2,000,000. Zenith measures the Non-Controlling Interest (NCI) at fair value, which was $550,000 at the acquisition date. During the year ended 31 December 20X5, Zenith sold goods to Apex for $400,000 at a mark-up of 25%. Half of these goods remain in Apex's inventory at year-end. At 31 December 20X5, Zenith's retained earnings are $5,000,000. Apex's retained earnings were $1,000,000 at acquisition and $1,500,000 at year-end.* If Zenith's current liabilities are $800,000 and Apex's current liabilities are $300,000, and there is an intra-group payable of $50,000 owed by Apex to Zenith, what is the consolidated current liabilities figure?

Under IFRS 10 Consolidated Financial Statements, which of the following is the primary criterion for determining whether a parent-subsidiary relationship exists?

How is an investment in an associate accounted for in the consolidated financial statements?

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. What is the fair value of the consideration transferred by TechNova PLC? (Enter numbers only)

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. What is the value of CyberNetix Ltd's net assets at the date of acquisition? (Enter numbers only)

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. Calculate the Goodwill arising on acquisition. (Enter numbers only)

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. What is the Non-Controlling Interest (NCI) share of CyberNetix's post-acquisition profit for the year? (Enter numbers only)

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. What is the value of the Non-Controlling Interest (NCI) at the year-end (31 Dec 20X5)? (Enter numbers only)

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. What amount must be deducted from consolidated revenue and consolidated cost of sales to eliminate the intra-group trading? (Enter numbers only)

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. Calculate the total profit made by TechNova on the intra-group sale of $80,000. (Enter numbers only)

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. Calculate the Provision for Unrealized Profit (PUP) that must be eliminated from consolidated inventory. (Enter numbers only)

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. Which entity's retained earnings must be reduced by the Provision for Unrealized Profit (PUP)?

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. What is TechNova's share of CyberNetix's post-acquisition retained earnings to be included in Consolidated Retained Earnings? (Enter numbers only)

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. If TechNova's own individual retained earnings at year-end are $800,000, what is the Consolidated Retained Earnings figure?

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. At year-end, CyberNetix still owes TechNova $20,000 for the goods purchased. How is this treated in the consolidated statement of financial position?

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. If CyberNetix had sent a cheque for $5,000 to TechNova on 30 Dec 20X5, which TechNova did not receive until 3 Jan 20X6, how is this 'cash in transit' handled on consolidation?

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. What figure for Share Capital will appear in the Consolidated Statement of Financial Position?

Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000. What is the primary purpose of preparing these consolidated financial statements?

An investment firm acquires 30% of the voting shares of another entity. It has representation on the board of directors and participates in policy-making processes, but does not have control or joint control. How should this investment be classified and accounted for in the consolidated financial statements?

MediaGroup Co acquires 100% of the share capital of PrintWorks Ltd for $800,000. At the date of acquisition, the fair value of PrintWorks' net assets was $650,000. What is the value of goodwill arising on acquisition? (Enter numbers only)

Food & Bev Holdings acquires 75% of SnackCo. At the reporting date, SnackCo reports a profit after tax of $100,000. During the year, SnackCo sold goods to Food & Bev Holdings, and there is an unrealized profit of $20,000 in Food & Bev's closing inventory. What is the Non-Controlling Interest (NCI) share of SnackCo's profit for the year?

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)

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 should the deferred consideration be recorded in the consolidated Statement of Financial Position at 31 December 20X4?

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 fair value of Nano Assembly's net assets at the date of acquisition? (Enter numbers only)

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: Calculate the Goodwill arising on acquisition. (Enter numbers only)

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 extra depreciation charge for the year ended 31 December 20X4 arising from the fair value adjustment on the plant? (Enter numbers only)

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 unrealized profit on the intra-group sale of components? (Enter numbers only)

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 Provision for Unrealized Profit (PURP) that must be eliminated from consolidated inventory? (Enter numbers only)

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: Which entity's retained earnings should be reduced by the PURP adjustment?

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 Nano Assembly's adjusted post-acquisition retained earnings? (Enter numbers only)

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 value of the Non-Controlling Interest (NCI) in the consolidated Statement of Financial Position at 31 December 20X4? (Enter numbers only)

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 intra-group sale of $80,000 treated in the consolidated Statement of Profit or Loss?

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 PURP of $8,000 treated in the consolidated Statement of Profit or Loss?

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?

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 impact of the unwinding of the discount on the deferred consideration in the consolidated Statement of Profit or Loss?

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: If Quantum Robotics Co's own retained earnings at 31 December 20X4 were $1,200,000, what is the Consolidated Retained Earnings figure? (Enter numbers only)

Section A According to IFRS 10 Consolidated Financial Statements, an investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Which TWO of the following are essential elements of control?

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. What is the fair value of the consideration transferred by Nebula Aerospace? (Enter the number only)

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. What are the net assets of Comet Components at the date of acquisition? (Enter the number only)

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. Calculate the Goodwill arising on acquisition. (Enter the number only)

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. What is the value of the Non-Controlling Interest (NCI) at the date of acquisition? (Enter the number only)

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. What are Comet's total retained earnings at the year-end (31 December 20X5) before any consolidation adjustments? (Enter the number only)

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. Calculate the Provision for Unrealized Profit (PUP) in inventory at year-end. (Enter the number only)

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. Which entity's retained earnings must be reduced by the Provision for Unrealized Profit (PUP)?

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. Calculate the NCI share of Comet's post-acquisition profit for the year. (Enter the number only)

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. Calculate the total value of the Non-Controlling Interest (NCI) to be shown in the consolidated statement of financial position at 31 December 20X5. (Enter the number only)

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. What amount should be deducted from consolidated Revenue in respect of the intra-group trading? (Enter the number only)

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. Before adjusting for the PUP, what amount should be deducted from consolidated Cost of Sales in respect of the intra-group trading? (Enter the number only)

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. How is the $20,000 intra-group balance treated in the consolidated statement of financial position?

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. Assume that at year-end, an impairment review determined that Goodwill should be impaired by $10,000. What is the carrying amount of Goodwill in the consolidated statement of financial position at 31 December 20X5? (Enter the number only)

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. Because the NCI was valued at fair value at acquisition, how does the $10,000 goodwill impairment affect the NCI at year-end?

Section B - Case 1: Group Consolidations **Scenario: Nebula Aerospace** On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000. During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end. Assuming Nebula Aerospace's own retained earnings at 31 December 20X5 are $800,000, and ignoring the goodwill impairment from the previous questions, calculate the Consolidated Retained Earnings at 31 December 20X5. (Enter the number only)

Section A Oceanic Shipping PLC acquired 75% of the ordinary share capital of Marine Logistics Ltd on 1 September 20X4. Marine Logistics Ltd's profit for the year ended 31 December 20X4 was $1,200,000, accruing evenly throughout the year. What amount of Marine Logistics Ltd's profit should be included in the consolidated statement of profit or loss for the year ended 31 December 20X4?

Section A ParentCo acquired 60% of SubCo on 1 January 20X1. During the year ended 31 December 20X1, SubCo sold goods to ParentCo for $50,000. SubCo applies a mark-up on cost of 25%. At the year-end, 40% of these goods remained in ParentCo's inventory. What is the provision for unrealized profit (PUP) that must be eliminated in the consolidated financial statements?

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). Calculate the total consideration transferred by GlobalTech PLC for the acquisition of CloudServe Ltd (in $ millions).

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). What is the percentage of the Non-Controlling Interest (NCI) in CloudServe Ltd?

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). Calculate the Goodwill arising on acquisition (in $ millions).

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). What is the gross profit margin percentage on the intra-group sales?

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). Calculate the total profit made by CloudServe on the intra-group sales (in $).

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). Calculate the Provision for Unrealized Profit (PUP) in inventory at year-end (in $).

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). What adjustment is required to consolidated Revenue for the intra-group sales?

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). What is the net adjustment required to consolidated Cost of Sales for the intra-group trading and PUP?

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). Calculate CloudServe's post-acquisition profit for the year ended 31 December 20X5 (in $).

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). Calculate the NCI share of CloudServe's post-acquisition profit, taking into account the PUP adjustment (in $).

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). Calculate the value of the Non-Controlling Interest (NCI) to be shown in the consolidated statement of financial position at 31 December 20X5 (in $).

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). At year-end, GlobalTech owes CloudServe $200,000 for the intra-group purchases. How is this treated in the consolidated statement of financial position?

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). Assume that at year-end, an impairment review determines that Goodwill has been impaired by $100,000. Under the fair value method of valuing NCI, how does this impairment affect the consolidated retained earnings?

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). Following the previous question, what is the impact of the $100,000 goodwill impairment on the carrying value of the NCI at year-end (in $)?

Section B - Case 1 Scenario: GlobalTech PLC acquired 80% of CloudServe Ltd on 1 July 20X5. Year-end is 31 December 20X5. GlobalTech paid $5m cash and issued 1m shares (market value $2 each). CloudServe's net assets at acquisition were $6m. Fair value of NCI at acquisition was $1.5m. Post-acquisition, CloudServe sold goods to GlobalTech for $1m at a 25% mark-up on cost. Half of these goods remain in inventory at year-end. CloudServe's profit for the full year was $800k (accruing evenly). If GlobalTech had instead valued the NCI at its proportionate share of CloudServe's net assets at acquisition, what would the Goodwill have been?