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Unformatted text preview: EFA4D10 CGA-Canada, 2010 Page 1 of 12 CGA-CANADA FINANCIAL ACCOUNTING: CONSOLIDATIONS &amp;amp;amp;amp; ADVANCED ISSUES [FA4] EXAMINATION December 2010 Marks Time: 4 Hours Notes: 1. All calculations must be shown in an orderly manner to obtain part marks. 2. Round all calculations to the nearest dollar. 3. Narratives for journal entries are not required unless specifically requested. 4. Assume a December 31 fiscal year end unless specifically stated otherwise. 5. Assume all amounts are material unless directed otherwise. 6. Assume all companies are public companies unless otherwise noted. 7. Assume no companies use differential reporting unless otherwise noted. 8. Assume companies apply new CICA Handbook sections related to Business Combinations; that is, sections 1582, 1601, and 1602. 28 Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a) (1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Note: 2 marks each a. On January 1, 2011, HOOK Corp. purchased 100% of the voting shares of TRIP Inc. In which accounting record(s) should the purchase discrepancy be recorded? 1) In the general ledger of both the parent and subsidiary companies 2) In the general ledger of the parent company and on the consolidated worksheet 3) In the general ledger of both the parent and subsidiary companies and on the consolidated worksheet 4) Only on the consolidated worksheet b. On December 31, 2010, the shareholders equity of LIN Inc. consisted of the following: Preferred shares $ 200,000 Common shares 400,000 Retained earnings 600,000 Total $ 1,200,000 The preferred shares are cumulative and non-participating. The annual dividend on the preferred shares is 8%. There were no dividends in arrears on December 31, 2010. On December 31, 2010, BLU Ltd. purchased 80% of the common shares of LIN for $1,500,000. What was the purchase discrepancy on the date of acquisition? 1) $475,000 2) $675,000 3) $700,000 4) $875,000 Continued... EFA4D10 CGA-Canada, 2010 Page 2 of 12 Note: Use the following information to answer parts (c) to (e). On November 30, 2010, GOL Company purchased 70% of the outstanding common shares of LEY Company for $3,640,000. On that date, the shareholders equity of LEY was $3,000,000. The fair value of LEYs identifiable net assets was $3,500,000. c. At what amount should non-controlling interests be reported on the consolidated balance sheet at November 30, 2010, assuming that GOL has control over LEY and uses the fair value enterprise method?...
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This note was uploaded on 12/13/2011 for the course IAF 710 taught by Professor Ellmen during the Fall '11 term at Seneca.
- Fall '11