ACCA Applied Knowledge (BT, MA, FA) · Financial Accounting (FA)

Consolidated financial statements

12 practice questions, each with the answer and an explanation.

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Random questions from this topic, one at a time. You see the answer and the explanation straight after each one.

All 12 questions

  1. Parent plc acquires 80% of the ordinary shares of Sub Ltd for £500,000. At the date of acquisition the net assets of Sub Ltd were £450,000 at fair value. Non-controlling interest is measured at its pr…
  2. Using the same facts as before, but measuring non-controlling interest at its fair value of £95,000 at acquisition, what is goodwill?
  3. At the year end, Sub Ltd, an 80% owned subsidiary, has net assets of £520,000. What non-controlling interest is shown in the consolidated statement of financial position, assuming NCI is measured at i…
  4. Parent plc sold goods to its 75% subsidiary for £120,000, at a mark-up of 25% on cost. Half of these goods remain in the subsidiary's inventory at the year end. What provision for unrealised profit (P…
  5. Parent plc has trade receivables of £60,000 and Sub Ltd has trade receivables of £40,000. Sub Ltd owes Parent plc £8,000, which is included in Parent plc's receivables and in Sub Ltd's payables. What…
  6. Parent plc owns 75% of Sub Ltd, acquired when Sub's retained earnings were £100,000. Parent's retained earnings are £300,000 and Sub's are £180,000 at the year end. What are consolidated retained earn…
  7. Sub Ltd made a profit of £120,000 for the year ended 31 December. Parent plc acquired control of it on 1 October. Profits arise evenly through the year. How much of Sub Ltd's profit for the year is in…
  8. Under IAS 28, an investor holds 30% of the voting shares of another entity and has representation on its board but does not control it. How is the investment accounted for in the consolidated financia…
  9. Investor plc acquired 30% of Assoc Ltd for £150,000. During the following year Assoc Ltd reported profit after tax of £80,000 and paid dividends of £20,000. What is the carrying amount of the investme…
  10. Parent plc owns 80% of Sub Ltd and has retained earnings of £500,000. Sub Ltd's retained earnings are £220,000 at the year end and were £120,000 at acquisition. Parent sold goods to Sub, and £8,000 of…
  11. Parent plc buys 75% of Sub Ltd for £640,000. At acquisition Sub's net assets in its own books were £600,000, but its land was worth £80,000 more than its carrying amount. Non-controlling interest is m…
  12. Sub Ltd, 80% owned by Parent plc, sold goods to Parent for £60,000 at a profit margin of 25% on selling price. Half of these goods remain in Parent's inventory at the year end. By how much are the gro…

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