I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

QUESTION 

Consolidated non-current assets

 

Apple Co owns 60% of Pear Co. Apple has non-current assets of $80,000 and Pear has non-current 

assets of $50,000. 

Consolidated non-current assets is calculated as: 

 

$     

Apple 80,000 

Pear 60% × $50,000 

  

  30,000 

 

  

110,000 

True or false? Explain your answer. 

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CHAPTER 23  

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  INTRODUCTION TO CONSOLIDATED FINANCIAL STATEMENTS 

 

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ANSWER 

False. The correct calculation is: 

 

$     

Apple 80,000 

Pear 

   50,000 

 

 130,000 

Pear is a subsidiary of Apple, which controls all its non-current assets, not just 60%. The 40% non-

controlling interest is accounted for separately.  

QUESTION 

Consolidated receivables

 

Apple Co owns 60% of Pear Co. Apple has receivables of $60,000 and Pear has receivables of 

$40,000. Pear owes Apple $10,000. What are consolidated receivables? 

A $74,000 

B $84,000 

C $90,000 

D $100,000 

 

ANSWER 

C 

Consolidated receivables 

 

$     

Apple 60,000 

Less intra-group 

 (10,000) 

 50,000 

Pear 

  40,000 

Consolidated 

  90,000 

QUESTION 

Consolidated payables

 

Apple Co owns 60% of Pear Co. Pear has payables of $90,000, of which $10,000 is owed to Apple. 

Apple has payables of $120,000.  

Required 

Calculate the consolidated payables balance.  

ANSWER 

Consolidated payables 

 

 $     

 $     

Apple  

 120,000 

Pear 

 90,000  

Less intra-group 

 (10,000)  

 

 

 

 

  80,000 

 

 

 200,000 

 

 

2

   Subsidiaries 

A subsidiary is an entity controlled by another entity.  

Now you know what a group is in general terms and what consolidation means in principle, you are 

ready to learn some more formal definitions.  

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