Consolidation other issues Complete Test Bank Chapter 26

Chapter 26 Testbank

1. AASB 10 Consolidated Financial Statements prescribes that intragroup balances, transactions, income and expenses be eliminated in full on consolidation. This requirement is consistent with the parent entity concept of consolidation.

AACSB: Reflective thinking
Difficulty: Easy
Learning Objective: 26-01 Understand the nature and meaning of intragroup transactions.
Section: Introduction to accounting for intragroup transactions
Topic: Introduction to accounting for intragroup transactions

2. AASB 10 Consolidated Financial Statements prescribes that intragroup balances, transactions, income and expenses be eliminated in full on consolidation even where the parent entity holds only a fraction of the issued equity.

3. If a subsidiary makes a dividend payment out of pre-acquisition earnings, the parent entity should consider whether its investment in the subsidiary is impaired.

AACSB: Reflective thinking
Difficulty: Medium
Learning Objective: 26-02 Understand how and why to eliminate intragroup dividends on consolidation from both post-acquisition and pre-acquisition earnings.
Section: Dividend payments from pre- and post-acquisition earnings
Topic: Dividend payments from pre- and post-acquisition earnings

4. Intragroup profits are eliminated in consolidation to reduce consolidated profits.

5. Intragroup profits are eliminated in consolidation to exclude intragroup transactions in the parent entity's financial statements.

6. Parent Ltd sells inventories to Child Ltd amounting to $200 000 during the financial year. The inventories are no longer in the hands of Child Ltd at year-end. Parent Ltd is no longer required to eliminate these intragroup transactions because these transactions have been realised by sale to external parties.

AACSB: Reflective thinking
Difficulty: Medium
Learning Objective: 26-03 Know how to account for intragroup sales of inventory inclusive of the related tax effects.
Section: Intragroup sale of inventory
Topic: Intragroup sale of inventory

7. Transactions between entities that form an economic group should be eliminated in proportion to the level of control between the parent entity and the subsidiary entity.

8. The level of equity ownership is not a factor in deciding what proportion of a transaction between entities in a group should be eliminated.

9. Dividends may be identified as being paid out of pre-acquisition or post-acquisition profits by a subsidiary company. Where dividends are paid out of post-acquisition profits the investment in the subsidiary should be decreased by the amount of the dividend.

AACSB: Reflective thinking
Difficulty: Easy
Learning Objective: 26-02 Understand how and why to eliminate intragroup dividends on consolidation from both post-acquisition and pre-acquisition earnings.
Section: Dividend payments from pre- and post-acquisition earnings
Topic: Dividend payments from pre- and post-acquisition earnings

10. Companies in an economic entity may increase the level of consolidated sales reported by selling inventory between themselves.

AACSB: Reflective thinking
Difficulty: Easy
Learning Objective: 26-03 Know how to account for intragroup sales of inventory inclusive of the related tax effects.
Section: Intragroup sale of inventory
Topic: Intragroup sale of inventory

11. Company A owns 51% of the issued capital of Company B and Company A owns 60% of the issued capital of Company C. Company A controls both B and C. If Company A sells inventory for $500 000 to Company C and Company C sells it to Company B for $600 000 and Company B sells it to an entity external to the group for $700 000, the amount of sales revenue to be recorded for that inventory for the group of companies is $1 560 000.

12. The value of inventory on hand for the economic group at the end of the period will always equal the sum of the inventory on hand at the end of the period for each of the entities in the group.

13. In the absence of an election to be a 'tax consolidated group', the Australian Tax Office assesses income earned by the individual legal entities in an economic group and does not take into consideration consolidation adjustments required for group accounts.

14. Intragroup sales of non-current assets results in the need to eliminate the effect of any profit or loss on sale in the period of the sale and, in the rest of the periods of the asset's life, any tax effects of the profit or loss, the depreciation and accumulated depreciation will have to be adjusted for the life of the asset, along with the tax effects of the adjustment to depreciation.

AACSB: Reflective thinking
Difficulty: Medium
Learning Objective: 26-04 Know how to account for intragroup sales of non-current assets inclusive of the related tax effects.
Section: Sale of non-current assets within the group
Topic: Sale of non-current assets within the group

15. If we simply aggregate the sales of the parent and subsidiary companies, without adjustment, when there have been intragroup sales, total income would be overstated.

16. The fact that consolidation worksheets start 'afresh' each year means that the tax entry for eliminating unrealised profit in opening inventory requires a 'Dr' to deferred tax assets, rather than income tax expense.

17. Only dividends paid externally should be shown in the consolidated financial statements.

18. The term 'cum div' is used when shares are being bought with a dividend entitlement.

19. Examples of intragroup transactions include:

A. dividends payable to group members.
B. the payment of taxation.
C. the recognition of minority interests.
D. the sale of inventories to external parties.

20. Intragroup transactions that are to be eliminated in the consolidated accounts include:

A. inter-entity loans.
B. inter-entity sales of non-current assets.
C. the payment of management fees to a member of the group.
D. all of the given answers.

21. Dividends paid between entities in the group should be:

A. not permitted by the ultimate controlling entity because it does not make sense to exchange money between entities in the one economic group.
B. reflected in the group accounts because it reflects the economic return the group earned by investing in the companies that form its operations.
C. eliminated from the group accounts, but reflected in the individual legal entity accounts, since the group accounts reflect the many entities as one single economic entity.
D. retained in the consolidated statements but disclosed separately as related-party transactions.

22. Little Company declared a dividend of $90 000 for the period ended 30 June 2014. Big Company owns 100% of the equity of Little Company. Big Company accrues dividends when they are declared by its subsidiaries. What elimination entry would be required to prepare the consolidated financial statements for the group for the period ended 30 June 2014?

23. Monster Co Ltd owns 100% of the issued shares of Mini Co Ltd. Mini Co Ltd declared a dividend of $100 000 for the period ended 30 June 2014. Monster Co Ltd accrues dividends when they are declared by its subsidiaries. What elimination entry would be required to prepare the consolidated financial statements for the group for the period ended 30 June 2015?

24. The treatment of dividends, paid by a subsidiary, that are identified as paid out of pre-acquisition profits in the period they are paid, is to:

A. capitalise the dividend in the books of the parent entity as a further investment in the subsidiary. This amount will be eliminated on consolidation.
B. record dividend revenue and the receipt of cash in the books of the parent entity and then test the subsidiary for impairment.
C. record a return of the investment in the subsidiary by decreasing the investment in the subsidiary in the books of the parent entity. The amount of the investment will be eliminated on consolidation.
D. record a decrease in pre-acquisition reserves or retained profits in the books of the subsidiary so that on consolidation the elimination entry will automatically eliminate the effect of the dividend.

25. Stormy Ltd has purchased all the issued capital of Cloud Ltd at the beginning of the current period. At the end of the period Cloud Ltd declares a dividend of $50 000 that is identified as being paid out of pre-acquisition profits. What entries would Stormy Ltd and Cloud Ltd make in their own books? (Assume Stormy Ltd accrues the dividends of subsidiaries when they are declared.)

26. Forest Ltd purchased all the issued capital of Shrub Ltd on 1 July 2013 for cash consideration of $1 million. The fair value of Shrub Ltd's net assets at that date was $1 million made up of:

During the period ended 30 June 2014, Shrub Ltd declare a dividend of $100 000 out of pre-acquisition earnings. What consolidation journal entries would be required to prepare group accounts for the period?

27. Radio Ltd acquired all the issued capital of Wave Ltd on 1 July 2014 for cash consideration of $2 million. The fair value of the net assets of Wave Ltd at that date was $1.8 million as follows:

During the period ending 30 June 2015, Wave Ltd declare a dividend of $300 000 that is identified as being paid out of pre-acquisition profits. Goodwill had been determined to have impaired by $20 000 during the period. What consolidation journal entries would be required to prepare group accounts for the period ended 30 June 2015?

28. Hammer Ltd acquired all the issued capital of Nail Ltd on 1 July 2015 for cash consideration of $1.5 million. The fair value of the net assets of Nail Ltd at that date was $1.2 million as follows:

During the period ended 30 June 2016, Nail Ltd declared a dividend of $200 000 that is identified as being paid out of pre-acquisition profits and a further $100 000 is declared at the end of the period that is out of post-acquisition profits. Goodwill had been determined to have been impaired by $15 000 during the period. What consolidation journal entries would be required to prepare group accounts for the period ended 30 June 2016?

AACSB: Reflective thinking
Difficulty: Hard
Learning Objective: 26-02 Understand how and why to eliminate intragroup dividends on consolidation from both post-acquisition and pre-acquisition earnings.
Section: Dividend payments from pre- and post-acquisition earnings
Topic: Dividend payments from pre- and post-acquisition earnings

29. Large Company owns 80% of the issued capital of Smaller Company and Large Company owns 60% of the issued capital of Medium Company. The three companies form an economic entity for the purposes of consolidated accounts. During the period Smaller Company sold inventory to Medium for $400 000. Medium sold the same inventory to Large for $560 000 and Large sold it to an entity external to the group for $760 000. What are the sales revenue reported in the consolidated statements for this item?

A. $1 416 000
B. $1 720 000
C. $760 000
D. $400 000

30. Companies A, B and C are all part of the one economic entity, but are all separate legal entities required to prepare their own financial statements. Company A sold Company B's inventory that cost $56 000 for $78 000. At the end of the same period Company B has three-quarters of that inventory still on hand and the rest has been sold to an entity outside the economic group. At what amount should the inventory remaining in Company B be recorded in Company B's own financial statements?

A. $42 000
B. $58 500
C. $56 000
D. $14 625

31. Companies A, B and C are all part of the one economic entity, but are all separate legal entities required to prepare their own financial statements. Company A sold Company B inventory that cost $56 000 for $78 000. At the end of the same period Company B has three-quarters of that inventory still on hand and the rest has been sold to an entity outside the economic group. At what amount should the inventory remaining in Company B be recorded in the consolidated statements?

A. $14 625

B. $56 000
C. $58 500
D. $42 000

32. Meat Ltd purchased 100% of the issued capital of Pie Ltd for a cash consideration of $1.7 million on 1 July 2014. At that time the fair value of the net assets of Pie Ltd were represented by:

Goodwill had been determined to have been impaired by $20 000 during the period. During the period ended 30 June 2015, Pie Ltd sold inventory that cost $450 000 for $620 000 to Meat Ltd. Twenty per cent of this inventory remains on hand in Meat Ltd at the end of the year. Both companies use a perpetual inventory system. The taxation rate is 30%. At the end of the period Pie Ltd declared a dividend of $45 000 that has not yet been paid. What consolidation journal entries are required for the period ending 30 June 2015?

AACSB: Reflective thinking
Difficulty: Hard
Learning Objective: 26-03 Know how to account for intragroup sales of inventory inclusive of the related tax effects.
Section: Intragroup sale of inventory
Topic: Intragroup sale of inventory

33. French Ltd purchased 100% of the issued capital of Pastry Ltd for a cash consideration of $2.1 million on 1 July 2015. At that time the fair value of the net assets of Pastry Ltd were represented by:

Goodwill had been determined to have been impaired by $5000 during the period. During the period ended 30 June 2016 Pastry Ltd sold inventory that cost $190 000 for $300 000 to French Ltd. Sixty per cent of this inventory remains on hand in French Ltd at the end of the year. Both companies use a perpetual inventory system. The taxation rate is 30%.
What consolidation journal entries are required for the period ending 30 June 2016?

34. French Ltd owns 100% of the issued capital of Pastry Ltd. During the period ended 30 June 2014, Pastry Ltd sold inventory that cost $190 000 for $300 000 to French Ltd. Sixty per cent of this inventory remains on hand in French Ltd at the end of that year. Both companies use a perpetual inventory system. The taxation rate is 30%.
What consolidation journal entries are required in relation to the inter-company transaction for the period ending 30 June 2015?

35. Belgium Ltd owns all the issued capital of Chocolate Ltd. During the period ended 30 June 2015, Belgium Ltd sold Chocolate Ltd inventory that had a cost of $200 000 for $270 000. At the end of the current period Chocolate Ltd had 75% of that inventory still on hand; the rest was sold to entities external to the group. During the previous period Chocolate Ltd had sold inventory to Belgium Ltd at a profit of $49 000. At the end of that period (30 June 2014) Belgium Ltd still had 40% of that inventory on hand. That entire inventory was sold to parties external to the group during the current year. The taxation rate is 30% and both companies use a perpetual inventory system.
What consolidation journal entries are required to eliminate the effects of these transactions for the period ended 30 June 2015?

36. Zeus Ltd owns 100% of the issued capital of Ares Ltd. On 1 July 2015, Zeus Ltd purchased an item of equipment from Ares Ltd for $800 000. Ares had owned the equipment for 2 years. It originally cost $890 000 and the accumulated depreciation was $178 000 at the time of sale. The equipment has been depreciated over this time, but not written down or revalued. The remaining useful life of the equipment at 1 July 2015 is estimated to be 8 years. Zeus Ltd expects the benefits to be obtained from the equipment to be evenly received over its useful life. The tax rate is 30%.
What are the consolidation journal entries required for this inter-company transaction for the period ended 30 June 2016?

37. Zeus Ltd owns 100% of the issued capital of Ares Ltd. On 1 July 2012, Zeus Ltd purchased an item of equipment from Ares Ltd for $800 000. Ares had owned the equipment for 2 years. It originally cost $890 000 and the accumulated depreciation was $178 000 at the time of sale. The equipment has been depreciated over this time, but not written down or revalued. The remaining useful life of the equipment at 1 July 2012 is estimated to be 8 years. Zeus Ltd expects the benefits to be obtained from the equipment to be evenly received over its useful life. The tax rate is 30%.
What are the consolidation journal entries required for this inter-company transaction for the period ended 30 June 2014?

38. Apple Ltd owns all the issued capital of Pear Ltd. On 1 July 2014, Pear Ltd purchased an item of plant from Apple Ltd for $1 000 000. Apple Ltd had owned the plant for 5 years. It originally cost $1 350 000 and the accumulated depreciation at 1 July 2004 is $562 500. The remaining useful life of the equipment on the date of sale to Pear Ltd is estimated to be 7 years. The pattern of benefits is expected to be obtained from the equipment evenly over its useful life. The tax rate is 30%. Round all calculations to the nearest dollar.
What are the consolidation journal entries required for this inter-company transaction for the periods ended 30 June 2015 and 30 June 2016?

AACSB: Reflective thinking
Difficulty: Hard
Learning Objective: 26-04 Know how to account for intragroup sales of non-current assets inclusive of the related tax effects.
Section: Sale of non-current assets within the group
Topic: Sale of non-current assets within the group

39. Which of the following statements describes the reasons why tax adjustments may be required when eliminating the unrealised profit from intragroup sales of inventory?

A. Tax is paid on a group perspective and therefore one taxable income figure must be derived for the group.
B. Tax will be adjusted at the request of the Australian Taxation Office.
C. If tax has been paid by one of the separate legal entities, from the group's perspective this represents a deferral of the payment of tax.
D. If tax has been paid by one of the separate legal entities, from the group's perspective this represents a pre-payment of tax.

40. What is the amount of unrealised profit that needs to be eliminated at the end of the period, in the following situation, where Barker Limited is the parent of Corbett Limited? (Ignore the tax effect.) Barker purchases 500 units of inventory for $20 each. Barker sells this entire inventory to Corbett at a mark-up of 50%. At the end of the period, 100 units are on hand.

A. $1000
B. $2000
C. $3000
D. $5000

41. What is the amount of unrealised profit that needs to be eliminated at the end of the period, in the following situation, where Morecombe Limited is the parent of Wise Limited? (Ignore the tax effect.) Morecombe purchases 500 units of inventory for $20 each. Morecombe sells this entire inventory to Wise at a mark-up of 25%. Wise then sells half of the inventory to an external party. Half of the remaining amount (after the external sale) is sold back to Morecombe for $2500.

A. Cannot determine from the information given.
B. $300
C. $625
D. $1250

42. The journal entries to eliminate unrealised profit in closing inventory at 30 June 2014 were as follows:

What are the journal entries to eliminate the unrealised profits in opening inventory the following period?

43. A non-current asset was sold by Subsidiary Limited to Parent Limited during the 2013/14 financial year. The carrying amount of the asset at the time of the sale was $700 000. As part of the consolidation process, the following journal entry was passed.

What (a) amount did Parent Limited pay Subsidiary Limited for the asset; (b) was the cost of the asset as shown in the books of Subsidiary Limited?

A. (a) $900 000; (b) $1 400 000
B. (a) $900 000; (b) $1 200 000
C. (a) $700 000; (b) $1 200 000
D. (a) $900 000; (b) $800 000

AACSB: Reflective thinking
Difficulty: Easy
Learning Objective: 26-04 Know how to account for intragroup sales of non-current assets inclusive of the related tax effects.
Section: Sale of non-current assets within the group
Topic: Sale of non-current assets within the group

44. A non-current asset was sold by Subsidiary Limited to Parent Limited on 30 June 2014. The carrying amount of the asset at the time of the sale was $700 000. As part of the consolidation process, the following journal entry was passed.

Assuming there is another ten years of useful life remaining for the asset, what are the journal entries at 30 June 2016 to adjust for depreciation?

45. Lilo Ltd sells inventory items to its subsidiary Stitch Ltd. If during the financial year 2013, the unrealised profits in ending inventory in Stitch Ltd exceeds that of its unrealised profits in beginning inventory, which of the following statements is correct with respect to Lilo Ltd's consolidated financial statements after considering these transactions only?

A. Consolidated profit will decrease.
B. Consolidated deferred tax liability will increase.
C. Consolidated ending inventory will decrease.
D. Consolidated sales will be unaffected.

46. Penny Ltd sells inventory items to its subsidiary Bolt Ltd. If during the financial year 2013, the unrealised profits in ending inventory in Bolt Ltd is less than its unrealised profits in beginning inventory, which of the following statements is correct with respect to Penny Ltd's consolidated financial statements after considering these transactions only?

A. Consolidated profit will increase.
B. Consolidated deferred tax liability will increase.
C. Consolidated ending inventory will decrease.
D. Consolidated sales will be unaffected.

47. Aladdin Ltd sells inventory for a profit to its subsidiary Jasmine Ltd to be used as machinery in Jasmine Ltd's production process. The consolidation worksheet of Aladdin Ltd with respect to this transaction only should not include:

A. a debit to sales.
B. a credit to cost of sales.
C. a credit to inventories.
D. a credit to machinery.

48. Aladdin Ltd sold inventory items (with a cost of $100 000) to its subsidiary Genie Ltd for $120 000. Half of the inventory items were sold by Genie Ltd to external parties before the financial year end. Ignoring taxes, which of the following statements is correct with respect to this transaction only?

A. Consolidated sales will decrease by $60 000.
B. Consolidated sales will decrease by $100 000.
C. Consolidated profit will decrease by $10 000.
D. Consolidated profit will decrease by $20 000.

49. Alice Ltd sold inventory items to its subsidiary Mad Hatter Ltd and had the following intercompany transactions:
Cost of inventory $100 000 sold for $125 000 for the year ended 30 June 2012. Half of the inventory items were sold by Mad Hatter Ltd to external parties before the financial year end 30 June 2012.
Cost of inventory $75 000 sold for $100 000 for the year ended 30 June 2013. Half of the inventory items were sold by Mad Hatter Ltd to external parties before the financial year end 30 June 2013.
Ignoring taxes, which of the following statements is correct with respect to this transaction only for the year ended 30 June 2013?

A. Consolidated sales will decrease by $125 000.
B. Consolidated sales will increase by $25 000.
C. Consolidated profit will decrease by $12 500.
D. There will be no change in the consolidated profit.

50. Woody Ltd sold inventory items to its subsidiary Buzz Lightyear Ltd and had the following intercompany transactions:
Cost of inventory $300 000 sold for $375 000 for the year ended 30 June 2012. One third of the inventory items were sold by Buzz Lightyear Ltd to external parties before the financial year end 30 June 2012.
Cost of inventory $100 000 sold for $75 000 for the year ended 30 June 2013. Half of the inventory items were sold by Buzz Lightyear Ltd to external parties before the financial year end 30 June 2013.
Ignoring taxes, which of the following statements is correct with respect to this transaction only for the year ended 30 June 2013.

A. Consolidated sales will decrease by $100 000.
B. Consolidated sales will increase by $275 000.
C. Consolidated profit will increase by $62 500.
D. Consolidated profit will increase by $12 000.

51. A non-current asset was sold by Subsidiary Limited to Parent Limited during the 2013/14 financial year. The carrying amount of the asset at the time of the sale was $1 400 000. As part of the consolidation process, the following journal entry was passed.

What (a) amount did Parent Limited pay Subsidiary Limited for the asset; (b) was the cost of the asset as shown in the books of Subsidiary Limited?

A. (a) $1 800 000; (b) $1 400 000
B. (a) $1 800 000; (b) $1 600 000
C. (a) $1 400 000; (b) $2 400 000
D. (a) $1 800 000; (b) $2 400 000

52. Blue Ltd sold inventory items (with a cost of $90 000) to its subsidiary Maroon Ltd for $120 000. Half of the inventory items were sold by Maroon Ltd to external parties before the financial year end. Ignoring taxes, which of the following statements is correct with respect to this transaction only?

A. Consolidated sales will decrease by $60 000.
B. Consolidated sales will decrease by $100 000.
C. Consolidated profit will decrease by $15 000.
D. Consolidated profit will decrease by $20 000.

53. Tookey Ltd sold inventory items (with a cost of $75 000) to its subsidiary Milky Ltd for $135 000. A third of the inventory items were sold by Milky Ltd to external parties before the financial year end. Ignoring taxes, which of the following statements is correct with respect to this transaction only?

A. Consolidated sales will decrease by $75 000.
B. Consolidated sales will decrease by $95 000.
C. Consolidated profit will decrease by $60 000.
D. Consolidated profit will decrease by $40 000.

54. Which of the following is correct about inter-entity transactions?

A. The effects of all transactions between entities within the economic entity should be eliminated in full, even where the parent entity holds only a fraction of the issued equity.
B. The effects of all transactions between entities within the economic entity should be eliminated in proportion to the fraction of the issued equity.
C. The effects of some transactions between entities within the economic entity are eliminated in full, even where the parent entity holds only a fraction of the issued equity.
D. The effects of all transactions between entities within the economic entity are eliminated in accordance with the fair value of the transacted items where possible or based on arms-length transactions.

55. McKay Ltd is a parent entity of Shephard Ltd, a wholly owned subsidiary. Which of the following is of the dividends reported in McKay Ltd's consolidated statement of financial position?

A. Only intra-group dividends received from Shephard Ltd.
B. Only those paid by McKay Ltd to external shareholders.
C. Both those paid to McKay Ltd by Shephard Ltd and those paid to McKay Ltd's external shareholders.
D. An offset amount of both those paid to McKay Ltd by Shephard Ltd and those paid to McKay Ltd's external shareholders.

AACSB: Analytic
Difficulty: Medium
Learning Objective: 26-02 Understand how and why to eliminate intragroup dividends on consolidation from both post-acquisition and pre-acquisition earnings.
Section: Dividend payments from pre- and post-acquisition earnings
Topic: Dividend payments from pre- and post-acquisition earnings

56. Which of the following is about inter-entity sales of inventory?

A. Companies in an economic entity may increase the level of consolidated sales reported by selling inventory between themselves.
B. Transactions of inventory between entities that form an economic group should be eliminated in proportion to the level of control between the parent entity and the subsidiary entity.
C. If we simply aggregate the sales of the parent and subsidiary companies, without adjustment, when there have been intragroup sales, total income would be overstated.
D. The value of inventory in an inter-entity sale should be re-measured to fair value and the adjustment to record the sale at fair value recorded.

57. Pitt Ltd sells inventories to Upper Ltd during the financial year ended 30 June 2017. At 30 June 2017 50% of this inventory remained unsold. The inventories were held by Pitt Ltd at a value of $45 000 and were sold with an 80% mark-up to Upper Ltd. By 30 June 2018 all of this inventory is sold. What is the consolidation adjustment for this inventory now sold to external parties by Upper Ltd? Assume no tax.

DR	Retained Earnings—1 July 2018	40 500
CR	Cost of goods sold		40 500

DR	Retained Earnings—1 July 2018	22 500
CR	Cost of goods sold		22 500

DR	Sales revenue	40 500
CR	Cost of goods sold		40 500

DR	Sales revenue	22 500
CR	Cost of goods sold		22 500

58. Which of the following is correct about dividends paid by a subsidiary from pre-acquisition profits of the subsidiary?

A. These are accounted for as a return of part of the cost of the original investment.
B. These are not adjusted for and are shown on the parent entity's consolidated financial statements.
C. The dividends are recorded in the parent and subsidiary financial statements and only cash is adjusted.
D. These are eliminated by debiting Dividend income and crediting Dividend receivable in the parent's accounts.

Chapter 26 Testbank Summary

Category	# of Questions
AACSB: Analytic	2
AACSB: Reflective thinking	56
Difficulty: Easy	26
Difficulty: Hard	8
Difficulty: Medium	24
Learning Objective: 26-01 Understand the nature and meaning of intragroup transactions.	8
Learning Objective: 26-02 Understand how and why to eliminate intragroup dividends on consolidation from both post-acquisition and pre-acquisition earnings.	15
Learning Objective: 26-03 Know how to account for intragroup sales of inventory inclusive of the related tax effects.	28
Learning Objective: 26-04 Know how to account for intragroup sales of non-current assets inclusive of the related tax effects.	7
Section: Dividend payments from pre- and post-acquisition earnings	15
Section: Intragroup sale of inventory	28
Section: Introduction to accounting for intragroup transactions	8
Section: Sale of non-current assets within the group	7
Topic: Dividend payments from pre- and post-acquisition earnings	15
Topic: Intragroup sale of inventory	28
Topic: Introduction to accounting for intragroup transactions	8
Topic: Sale of non-current assets within the group	7

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Chapter 26 Consolidation other issues

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