F7.2

1. Germane has a number of relationships with other companies.

In which of the following relationships is Germane necessarily the parent company?

(i) Foll has 50,000 non-voting and 100,000 voting equity shares in issue with each share receiving the same dividend. Germane owns all of Foll’s non-voting shares and 40,000 of its voting shares

(ii) Kipp has 1 million equity shares in issue of which Germane owns 40%. Germane also owns $800,000 out of $1 million 8% convertible loan notes issued by Kipp. These loan notes may be converted on the basis of 40 equity shares for each $100 of loan note, or they may be redeemed in cash at the option of the holder

(iii) Germane owns 49% of the equity shares in Polly and 52% of its non-redeemable preference shares. As a result of these investments, Germane receives variable returns from Polly and has the ability to affect these returns through its power over Polly

• (i) only

• (i) and (ii) only

• (ii) and (iii) only

• All three

• $36,900

• $33,300

• $39,100

• $40,100

Ace acquired 75% of Base on 1 January 20X5 when Base's retained earnings were $28m. At this date, the fair value of Base's plant and equipment was $10m greater than the book value shown in Base's financial statements. This plant and equipment had a remaining life of five years.

Ace elected to measure non-controlling interests at acquisition at fair value. The fair value of the non-controlling interests in Base at acquisition was $12m.

In the group statement of financial position of Ace, what will be the valuation of plant and equipment and non-controlling interests? ($'000)

• 124,000 & 17,500

• 128,000 & 16,000

• 130,000 & 16,500

• 134,000 & 15,500

1. Salmon owns 100% of the issued share capital of Tuna. Goods were purchased by Salmon from its subsidiary during the year, yielding a profit of 20% on cost to Tuna. Salmon's inventories at the year end included goods at a valuation of $18,000 which had been bought from Tuna.

What is the provision for unrealised profit for the purpose of the consolidated accounts?

• $3,000

• $4,000

• $5,000

• $6,000

1. Oxford owns 100% of the issued share capital of Cambridge, and sells goods to its subsidiary at a profit margin of 20% on selling price. At the year end, their statements of financial position showed inventories of Oxford is $290,000 and Cambridge is $160,000.

The inventories of Cambridge included $40,000 of goods supplied by Oxford and there were inventories in transit amounting to a further $20,000.

At what value should inventories appear in the consolidated statement of financial position?

• $438,000

• $442,000

• $458,000

• $462,000

1. Rugby has a 75% subsidiary, Stafford and is preparing its consolidated statement of financial position on 31 December 20X6. The carrying amount of property, plant and equipment in the two companies at that date is:

Rugby $260,000

Staffor $80,000

On 1 January 20X6 Stafford had transferred an item of equipment to Rugby for $40,000. At the date of transfer the equipment which had cost $70,000 had a carrying amount of $30,000 and a remaining useful life of five years. The group accounting policy is to depreciate equipment on a straight line basis down to a nil residual value. It is also the group policy not to revalue property, plant and equipment.

What is the figure that will be disclosed as the carrying amount of property, plant and equipment in the consolidated statement of financial position of Rugby as on 31 December 20X6?

• $340,000

• $332,000

• $330,000

• $312,000