Reference no: EM132586584

Question i). The Sulafat Company has a 70% subsidiary Harbinger and is a venturer in Thabit, a joint venture company. During the financial year to 31 December 2017, Sulafat sold goods to both companies. Consolidated financial statements are prepared combining the financial statements of Sulafat and Harbinger. Under IAS24 Related party disclosures, in the separate financial statements of Sulafat for 2017, is separate disclosure required for transactions with Sulafat or Harbunger or Thabit. If any, why? short Explain.

Question ii). The Druckman Company completed the following transactions in the year to 31 December 2017:

(1) Sold a car for Tk. 9,250 to the uncle of Druckman's finance director.

(2) Sold goods to the value of Tk.12,400 to Quokka, a company owned by the daughter of Druckman's managing director. Quokka has no other connection with Druckman. Which transactions, if any, require disclosure in the financial statements of Druckman under IAS24 Related party disclosures? Why?

Question iii). The Stead Company has a wholly-owned subsidiary, Guanaco. During the year to 30 June 2017, Stead sold goods to Guanaco totalling Tk. 250,000. Guanaco paid Tk.135,000 of this debt before the year end and then encountered financial difficulties. Guanaco is not expected to be able to pay the remainder of the balance and therefore it has been provided against as uncollectible. Administration costs incurred as a result of Stead's credit controllers chasing the debt by have been calculated as Tk. 600. Under the minimum disclosure requirements of IAS24 Related party disclosures, which TWO of the following are required to be disclosed in relation to this arrangement?

A) The costs of the credit control department incurred in pursuing the debt

B) Details of any guarantees received in relation to the outstanding balance

C) The provision in relation to the debt being uncollectible

D) Future plans regarding trading arrangements with this subsidiary

Question iv). Eleanor is a director of The Tartarus Company. She also owns 65% of The Grison Company and is a director of, but not a shareholder in, The Flounder Company. Eleanor's husband is the sole shareholder in The Koala Company. Eleanor's daughter holds 5% of the shares in The Bluegill Company. The only involvement she has in the company is to receive dividends. Which TWO companies would be classified under IAS24 Related party disclosures as related parties of Tartarus?

Question v). The Atrato Company carried out the following four transactions during the year ended 31 March 2018. Which TWO of the four are related party transactions according to IAS24 Related Party Transactions?

A) Transferred goods from inventory to a shareholder owning 40% of the company's ordinary shares

B) Sold a company car to the wife of the managing director

C) Sold an asset to The Little Company, a sales agent

D) Took out a Tk.1 million bank loan

Question vi). According to IAS24 Related party disclosures, which ONE of the following is not a related party of The Parnaby Company?

A) A shareholder of The Parnaby Company owning 30% of the ordinary share capital

B) An entity providing banking facilities to The Parnaby Company

C) An associate of The Parnaby Company

D) Key management personnel of The Parnaby Company