On 1 October 2019 A-Star Co acquired 15 million of B-Star Co's 50 million shares in exchange for 40 million of its own shares. The fair value of A-Star Co's shares at the date of this share exchange was £2 each. B-Star Co's profit is subject to seasonal variation. Its profit for the year ended 31 March 2020 was £60 million. £20 million of this profit was made from 1 April 2019 to 30 September 2019. A-Star Co has one subsidiary and no other investments apart from B-Star Co. What amount will be shown as 'investment in associate' in the consolidated statement of financial position of A-Star Co as at 31 March 2020? O £92 million O £50 million O £65 million O £80 million

On 1 October 2019 A-Star Co acquired 15 million of B-Star Co's 50 million shares in exchange for 40 million of its own shares. The fair value of A-Star Co's shares at the date of this share exchange was £2 each. B-Star Co's profit is subject to seasonal variation. Its profit for the year ended 31 March 2020 was £60 million. £20 million of this profit was made from 1 April 2019 to 30 September 2019. A-Star Co has one subsidiary and no other investments apart from B-Star Co. What amount will be shown as 'investment in associate' in the consolidated statement of financial position of A-Star Co as at 31 March 2020? O £92 million O £50 million O £65 million O £80 million

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On 1 July 2015, Ausra purchased 75% of Danute by way of a share exchange of two new shares in Ausra for every three purchased in Danute plus an immediate cash payment of $11,160,000. Ausra’s share price at the acquisition date was $4.70. Only the cash element of the consideration has been recorded. On the same date, Ausra purchased $5,000,000 of Danute’s 10% loan notes at par. The summarised financial statements of both companies are as follows: Statement of Comprehensive Income for the year ended 31 December 2015 Ausra Danute $ 000 $ 000 Revenue 120,000 48,000 Cost of sales (84,000) (40,000) Gross profit 36,000 8,000 Operating expenses (11,900) (400) Profit from operations 24,100 7,600 Other income 300 - Finance costs - (1,200) Profit before tax 24,400 6,400 Income tax expense (6,000) (1,200) Profit for the year 18,400 5,200 Statements of Financial Position at 31…
On 1 July 2015, Ausra purchased 75% of Danute by way of a share exchange of two new shares in Ausra for every three purchased in Danute plus an immediate cash payment of $1,160,000. Ausra's share price at the acquisition date was $4.70. Only the cash element of the consideration has been recorded. On the same date, Ausra purchased $5,000,000 of Danute's 10% loan notes at par. The summarised fimancial statements of both companies are as follows: r Snip Statement of Comprehensive Income for the year ended 31 December 2015 Ausra S 00 120,000 Danute S 000 48,000 Revenue Costof sales Gross profit Operating expenses Profit from operations Other income (84,000) 36,000 (11,900) 24,100 (40,000) 8,000 (400) 7,600 300 Fimance costs (1,200) 6,400 Profit before tax 24,400 Income tax expense Profit for the year (6,000) 18,400 (1,200) 5,200 Statements of Financial Position at 31 December 2015 Ausra Danute S 000 S 000 Non-current assets: Property, plant and equipment 38,640 16,000 Investments 16,280…
On 1 July 2015, Ausra purchased 75% of Danute by way of a share exchange of two new shares in Ausra for every three purchased in Danute plus an immediate cash payment of $11,160,000. Ausra’s share price at the acquisition date was $4.70. Only the cash element of the consideration has been recorded. On the same date, Ausra purchased $5,000,000 of Danute’s 10% loan notes at par. The summarised financial statements of both companies are as follows: Statements of Financial Position at 31 December 2015 Ausra Danute $ 000 $ 000 Non-current assets: Property, plant and equipment 38,640 16,000 Investments 16,280 - 54,920 16,000 Equity and liabilities Ordinary shares of $1 each 40,000 4,000 Retained earnings 17,720 8,800 Revaluation reserve 7,200 - 64,920 12,800 Non-current liabilities 10% loan notes - 10,000 Current Liabilities 20,000 9,200 The following…
In October 2018, TLT Bhd decided to invest its idle cash in the shares of SGS Bhd. Therefore, on 1 November 2018, TLT purchased 200,000 shares of SGS at RM2.50 per share. The investment was measured at fair value through profit or loss. On the same date, TLT purchased put option on 200,000 shares of SGS at a premium of RM0.06 per share. The put option had an exercise price of RM2.50. The expiry date was 30 April 2019. The prices of the shares of STS and the put option were as follows: Date Price per unit of share Time value per unit of put option 30 November 2018 RM2.35 RM0.04 31 December 2018 RM2.40 RM0.03 REQUIRED: Prepare the journal entries on 1 November 2018, 30 November 2018 and 31 December 2018 with regard to the investment in shares of SGS and the purchase of put option in accordance with the fair value method.
On 1 July 2015, Ausra purchased 75% of Danute by way of a share exchange of two new shares in Ausra for every three purchased in Danute plus an immediate cash payment of $11,160,000. Ausra’s share price at the acquisition date was $4.70. Only the cash element of the consideration has been recorded. On the same date, Ausra purchased $5,000,000 of Danute’s 10% loan notes at par. The summarised financial statements of both companies are as follows: Statement of Comprehensive Income for the year ended 31 December 2015 Ausra Danute $ 000 $ 000 Revenue 120,000 48,000 Cost of sales (84,000) (40,000) Gross profit 36,000 8,000 Operating expenses (11,900) (400) Profit from operations 24,100 7,600 Other income 300 - Finance costs - (1,200) Profit before tax 24,400 6,400 Income tax expense (6,000) (1,200) Profit for the year 18,400 5,200 Statements of Financial Position at 31…
On October 1, 2020, XYZ, Inc. exchanged 2,000 shares of its P500 value ordinary shares held in treasury for a patent owned by Mars Company. The treasury shares were acquired in 2019 at a cost of P800,000. At the time of the exchange, XYZ's ordinary share was quoted at P550 per share and the patent had a net carrying value on Mars' books of P900,000. At what amount should Jupiter record the patent?
ABC Company and XYZ Company have announced terms of an exchange agreement under which ABC will issue 10,000 shares of its P5 par value ordinary shares to acquire all of XYZ’s assets. ABC’s shares are trading at P28, and XYZ’s P10 par value shares are trading at P15. Historical cost and fair value statement of financial position data on January 1, 2021, are as follows: (see image below) Based on the information provided, what amount will be reported for Ordinary Share in the combined company’s statement of financial position immediately following the business combination?
On 1 January 2019, Happy Bhd acquired 75% of the ordinary shares and 30% of thepreference shares of Lucky Bhd. The preference shares are classified as equity andthey carry a cumulative preference dividend of 10% per year. The payment ofdividend is discretionary and conditional on the company achieving sufficient profitsin each year. Dividends on ordinary shares can only be paid after all arrears ofpreference dividends have been paid. For the year ended 31 December 2021, LuckyBhd reported a profit after tax of RM70 million. Its equity consists of the followingcomponents: Cumulative preference shares of 100 million units 100,000Ordinary shares of 200,000 units 200,000Retained profits brought forward 80,000Profit after tax for year ended 2021 70,000Total 450,000 Required:(a) Compute the amount of…
On December 1, 2019, PT ABC exchanged 20.000 shares of its Rp10 par value ordinary shares held in treasury for a used machine. The treasury shares were acquired by ABC at a cost of Rp40 per share, and are accounted for under the cost method. On the date of the exchange, the ordinary shares had a fair value of Rp55 per share (the shares were originally issued at Rp30 per share). As a result of this exchange, ABC’s total equity will increase by:
On December 1, 2019, PT ABC exchanged 20.000 shares of its Rp10 par value ordinary shares held in treasury for a used machine. The treasury shares were acquired by ABC at a cost of Rp40 per share, and are accounted for under the cost method. On the date of the exchange, the ordinary shares had a fair value of Rp55 per share (the shares were originally issued at Rp30 per share). As a result of this exchange, ABC's total equity will increase by: * Rp900.000. O Rp800.000. Rp200.000. Rp1.100.000.