1.Hillusion Co acquired 80% of Skeptik Co on 1 July 20X2. In the post-acquisition period Hillusion Co sold goods to Skeptik Co at a price of $12 million. These goods had cost Hillusion Co $9 million. During the year to 31 March 20X3 Skeptik Co had sold $10 million (at cost to Skeptik Co) of these goods for $15 million. How will this affect group cost of sales in the consolidated statement of profit or loss of Hillusion Co for the year ended 31 March 20X3? A Increase by $11.5 million B Increase by $9.6 million C Decrease by $11.5 million D Decrease by $9.6 million 2.How should the $200,000 worth upgrade of new components which decreases economic benefit be accounted for? A Added to the carrying amount of the machine B Charged to profit or loss C Capitalised as a separate asset D Debited to accumulated depreciation When asset increases the the economic benefit wouldnt we capitalize it so when it decreases the benefit wouldn’t we charge as an expense
