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Supplementary objective test questions
12.5 Paul bought 40% of Simon on 1 July 20X7. Simon’s statement of profit or loss
for the year shows a profit of $450,000. Simon paid Paul a dividend of $50,000
on 1 December. At the year end, the investment in Simon was impaired by
$15,000.
What will be shown under ‘Share of profit from associate’ in the
consolidated statement of profit or loss for the year ended 31 December
20X7?
A $25,000
B $75,000
C $125,000
D $165,000
12.6 Poppy bought 30% of Sunflower on 1 January 20X6, when Sunflower had share
capital of $200,000 $1 shares and $400,000 retained earnings. The purchase
consideration was made by a share issue of one Poppy share for every four
shares bought in Sunflower. At the date of acquisition, Poppy’s shares had a
market value of $5 and Sunflower’s had a market value of $3. At the
31 December 20X6, Sunflower’s net assets were $550,000.
What is the value shown under ‘Investment in Associate’ in the
consolidated statement of financial position as at 31 December 20X6?
A $285,000
B $90,000
C $60,000
D $30,000
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