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AB has several subsidiaries, and exerts joint control over EF, an entity in which it holds 30% of the ordinary share capital. The parties sharing control have rights to the net assets of EF. During the financial year ended 30 April 20X5, EF sold goods to AB valued at $80,000. The cost of the goods to EF was $60,000. 25% of the goods remained in AB's inventory at 30 April 20X5. What is the amount of the adjustment required in respect of the inventory? Give your answer to the nearest $.
AB has several subsidiaries, and exerts joint control over EF, an entity in which it holds 30% of the ordinary share capital. The parties sharing control have rights to the net assets of EF. During the financial year ended 30 April 20X5, EF sold goods to AB valued at $80,000. The cost of the goods to EF was $60,000. 25% of the goods remained in AB's inventory at 30 April 20X5. What is the amount of the adjustment required in respect of the inventory? Give your answer to the nearest $.
1500
Which THREE of the following are permissible methods of measuring investments in associates and joint ventures in the parent’s separate financial statements?
Which THREE of the following are permissible methods of measuring investments in associates and joint ventures in the parent’s separate financial statements?
QR is one of three shareholders in another entity, LP. The majority shareholder holds 60.1%, the second shareholder holds 20% and QR holds 19.9% of the voting shares. The board of directors comprises six board members from the majority shareholder and two board members from each of QR and the 20% shareholder. A shareholders' agreement states that certain board and shareholder resolutions require unanimous or majority decision. There is no indication that the majority shareholder and the 20% shareholder act together in a common way. During the year, senior managers of QR were seconded to LP to provide technical advice. How should QR classify the investment in LP?
QR is one of three shareholders in another entity, LP. The majority shareholder holds 60.1%, the second shareholder holds 20% and QR holds 19.9% of the voting shares. The board of directors comprises six board members from the majority shareholder and two board members from each of QR and the 20% shareholder. A shareholders' agreement states that certain board and shareholder resolutions require unanimous or majority decision. There is no indication that the majority shareholder and the 20% shareholder act together in a common way. During the year, senior managers of QR were seconded to LP to provide technical advice. How should QR classify the investment in LP?
Which THREE of the following statements are true?
Which THREE of the following statements are true?
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Study Notes
Question 12.17
- AB controls EF, holding 30% of its ordinary shares
- EF sold goods to AB valued at $80,000
- Cost of goods to EF was $60,000
- 25% of the goods remained in AB's inventory
- Calculate the adjustment needed for the inventory
Question 12.18
- Acceptable methods for measuring investments in associates and joint ventures:
- At cost
- At fair value
- Using the equity method
Question 12.19
- QR is a shareholder in LP, holding 19.9% of the voting shares
- Majority shareholder has 60.1% of voting shares, and a second shareholder has 20%
- Board of directors comprises 6 members from majority shareholder and 2 from each of the other two
- Agreement requires unanimous or majority decisions for certain boards and shareholders decisions
- QR's investment in LP should be classified as a financial asset
Question 12.20
- True statements about joint operations and ventures:
- A joint operation is not always structured via a separate entity
- A joint venture is always structured through a separate entity
- For a joint arrangement, all shareholders must have joint control
- A joint venture uses the equity method in consolidated financial statements
- A contractual agreement and parties sharing control are key characteristics of a joint arrangement
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Description
This quiz covers key topics related to accounting for investments in associates, joint ventures, and the effects of transactions between investing entities. It includes calculations for inventory adjustments and acceptable measurement methods. Test your understanding of these complex accounting principles.
