Identifying a business combination

Chapter 34 – Associates Page 451 5. The Champlain Company owns 25 of The Berger Company. The following figures are from their separate financial statements: Champlain: Trade receivables CU840,000, including CU30,000 due from Berger. Berger: Trade receivables CU215,000, including CU50,000 due from Champlain. According to IAS28 Investments in associates, what figure should appear for trade receivables in Champlains consolidated statement of financial position? A CU840,000 B CU832,500 C CU1,035,000 D CU1,055,000 6. The Teletsko Company has a 35 interest in its associate, The Saimaa Company. At the current year end Teletsko holds inventory purchased from Saimaa on which Saimaa earned a profit of CU1,000,000. The groups consolidated statement of financial position has been drafted without any adjustments in relation to this holding of inventory. Under IAS28 Investments in associates, what adjustments should be made to the draft consolidated statement of financial position figures for inventories and retained earnings? Inventories Retained earnings A Reduce by CU350,000 Reduce by CU122,500 B Reduce by CU1,000,000 Reduce by CU350,000 C Reduce by CU350,000 Reduce by CU350,000 D Reduce by CU1,000,000 Reduce by CU1,000,000 7. The Michi Company owns 40 of The Nipigon Company. On 31 December 20X7 Nipigon sold to Michi a non-current asset for CU1,020,000. The carrying amount in Nipigons books on 31 December 20X7 was CU820,000. The consolidated statement of financial position has been drafted without any adjustments in relation to this non-current asset. Under IAS28 Investments in associates, what adjustments should be made to the consolidated statement of financial position figures for non-current assets and retained earnings? Non-current assets Retained earnings A Reduce by CU200,000 Reduce by CU200,000 B Reduce by CU80,000 Reduce by CU80,000 C Reduce by CU80,000 Reduce by CU32,000 D Reduce by CU200,000 Reduce by CU80,000 Chapter 34 – Associates Page 452 8. The Hanwell Company acquired a 30 equity interest in The Northfield Company for CU400,000 on 1 January 20X6. In the year to 31 December 20X6 Northfield earned profits of CU80,000 and paid no dividend. In the year to 31 December 20X7 Northfield incurred losses of CU32,000 and paid a dividend of CU10,000. In Hanwells consolidated statement of financial position at 31 December 20X7, what should be the carrying amount of its interest in Northfield, according to IAS28 Investments in associates? A CU438,000 B CU411,400 C CU414,400 D CU400,000