dditional Information: a) On the date of acquisition, an item of equipment of Man United. Ltd with a carrying amount of GHS60 million had a fair value of GHS96 million and had remaining useful life of ten years from that date. This fair valuation has not been reflected in the financial statement of Man United Ltd. b) The inventory of Chelsea Ltd at 31 December 2019 included GHS 16 million worth of goods purchased from Man United at cost plus 25% c) Chelsea Ltd earned a profit after tax of GHS 18 million in 2019. No dividend was paid in the year. d) The loan stock in the books of Chelsea Ltd was acquired by Man United Ltd on 1 June 2019. e) Included in the Man United Ltd receivables is GHS 8 million relating to inventory sold to Chelsea Ltd since acquisition. Chelsea raised a cheque for GHS 5 million and sent it to Man United Ltd on 30 December 2019. Man United Ltd got value for the cheque 2 January 2020. f) It is the policy of the group to value NCI at acquisition using the proportion of net assets method. Goodwill is impaired by GHS 10 million at the reporting date. REQUIRED: Prepare the Consolidated Statement of Financial Position of Man United Ltd Group as at 31 December 2019
dditional Information: a) On the date of acquisition, an item of equipment of Man United. Ltd with a carrying amount of GHS60 million had a fair value of GHS96 million and had remaining useful life of ten years from that date. This fair valuation has not been reflected in the financial statement of Man United Ltd. b) The inventory of Chelsea Ltd at 31 December 2019 included GHS 16 million worth of goods purchased from Man United at cost plus 25% c) Chelsea Ltd earned a profit after tax of GHS 18 million in 2019. No dividend was paid in the year. d) The loan stock in the books of Chelsea Ltd was acquired by Man United Ltd on 1 June 2019. e) Included in the Man United Ltd receivables is GHS 8 million relating to inventory sold to Chelsea Ltd since acquisition. Chelsea raised a cheque for GHS 5 million and sent it to Man United Ltd on 30 December 2019. Man United Ltd got value for the cheque 2 January 2020. f) It is the policy of the group to value NCI at acquisition using the proportion of net assets method. Goodwill is impaired by GHS 10 million at the reporting date. REQUIRED: Prepare the Consolidated Statement of Financial Position of Man United Ltd Group as at 31 December 2019
dditional Information: a) On the date of acquisition, an item of equipment of Man United. Ltd with a carrying amount of GHS60 million had a fair value of GHS96 million and had remaining useful life of ten years from that date. This fair valuation has not been reflected in the financial statement of Man United Ltd. b) The inventory of Chelsea Ltd at 31 December 2019 included GHS 16 million worth of goods purchased from Man United at cost plus 25% c) Chelsea Ltd earned a profit after tax of GHS 18 million in 2019. No dividend was paid in the year. d) The loan stock in the books of Chelsea Ltd was acquired by Man United Ltd on 1 June 2019. e) Included in the Man United Ltd receivables is GHS 8 million relating to inventory sold to Chelsea Ltd since acquisition. Chelsea raised a cheque for GHS 5 million and sent it to Man United Ltd on 30 December 2019. Man United Ltd got value for the cheque 2 January 2020. f) It is the policy of the group to value NCI at acquisition using the proportion of net assets method. Goodwill is impaired by GHS 10 million at the reporting date. REQUIRED: Prepare the Consolidated Statement of Financial Position of Man United Ltd Group as at 31 December 2019
Additional Information: a) On the date of acquisition, an item of equipment of Man United. Ltd with a carrying amount of GHS60 million had a fair value of GHS96 million and had remaining useful life of ten years from that date. This fair valuation has not been reflected in the financial statement of Man United Ltd. b) The inventory of Chelsea Ltd at 31 December 2019 included GHS 16 million worth of goods purchased from Man United at cost plus 25% c) Chelsea Ltd earned a profit after tax of GHS 18 million in 2019. No dividend was paid in the year. d) The loan stock in the books of Chelsea Ltd was acquired by Man United Ltd on 1 June 2019. e) Included in the Man United Ltd receivables is GHS 8 million relating to inventory sold to Chelsea Ltd since acquisition. Chelsea raised a cheque for GHS 5 million and sent it to Man United Ltd on 30 December 2019. Man United Ltd got value for the cheque 2 January 2020. f) It is the policy of the group to value NCI at acquisition using the proportion of net assets method. Goodwill is impaired by GHS 10 million at the reporting date. REQUIRED: Prepare the Consolidated Statement of Financial Position of Man United Ltd Group as at 31 December 2019
Transcribed Image Text:QUESTION 1
On 1 June 2019, Manchester United Ltd bought 48 million ordinary shares in Chelsea FC Ltd
paying GHS 280 million cash. The summarised statement of financial position for the two entities
as at 31 December 2019 were as follows:
Man Utd. Ltd
Chelsea Ltd
GHS’m
GHS’m
Non- current assets:
Property, plant and equipment
276
230
Investment
324
600
230
Current assets:
Inventory
30
34
Trade receivables
38
40
Cash and cash equivalents
4
72
74
Total assets
672
304
EQUITY AND LIABILITIES
Equity:
Share capital
Retained earnings
224
80
378
138
606
218
Non- current liabilities
8% loan stocks
40
Current liabilities
Trade payables
66
46
Equity and Liabilities
672
302
1
Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).
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