Exercise 2.1On 30 June 2017, two-third of the shares of STA Ltd. (with a totalcapital of $ 4.800.000) was acquired by HRR Ltd. the balance sheet ofSTA Ltd. showed a debit balance of $ 2.400.000 or 1 January 2017 anda credit balance of $ 1.440.000 on 31 December 2017. The investmentby HRR Ltd. in shares of STA Ltd. is $ 3.600.000.Calculate the cost of control or capital reserve.

Capital reserve in business acquisition includes the amount which is paid by the company in…

Answered: On 30 June 2017, two-third of the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

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Chapter1: Financial Statements And Business Decisions

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6. On 30 June 2017, two-third of the shares of SIC Ltd. (with a total capital of $ 4.800.000) was acquired by HOR Ltd. the Balance Sheet of SIC Ltd. showed a debit balance of $ 2.400.000 on 1st January 2017 and a credit balance of $ 1.440.000 on 31 December 2017. The investment by HOR Ltd. in shares of SIC Ltd. Is $ 3.600.000. Calculate the cost of control or capital reserve. (a) 720000 (b) 620000 (c) 360000 (d) 180000 7. Cash payments to and on behalf of employees is an example of: (a) Cash flow from Operating activities (b) Cash flow from Investing activities (c) Cash flow from Financing activities (d) None of the above 8.Financial Reporting Council is an organisation of which country? (a) The USA (b) The UK (c) Australia (d) Canada
Hanson Corporation purchases a 10% interest in Novic Company on January 1, 2016, and an additional 15% interest on January 1, 2018. These investments cost Hanson Corporation $80,000 and $110,000, respectively. The following stockholders’ equities of Novic Company are available: December 31, 2015 December 31, 2017 Common stock ($10 par). . . . . . . . . .$500,000 $500,000 Retained earnings . . . . . . . . . . . . . . . . . 250,000 300,000 Total equity . . . . . . . . . . . . . . . . . . . . . . $750,000 $800,000 Any excess of cost over book value on the original investment is attributed to goodwill. Any excess on the second purchase is attributable to equipment with a 4-year life. Novic Company has income of $30,000, $30,000, and $40,000 for 2016, 2017, and 2018, respectively. Novic pays dividends of $0.20 per share in 2017 and 2018. Ignore income tax considerations, and assume…
10 On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? Group of answer choices No entry P40,000 Dr. P1,035,000 Cr. P1,060,000 Cr.
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Ashong Plc has two subsidiaries, Yvonne Plc and Wett Plc. It purchased 10,000 shares in Yvonne Plc on 1 January 2015 for GH¢35,000 when the retained earnings of Yvonne Plc stood at GH¢21,000. It purchased 15,000 shares in Wett Plc for GH¢30,000 on 31 December 2015 when the retained earnings of Wett Plc stood at GH¢16,000. The issued share capital (all issued at GHC 1 each ) of the two subsidiaries is as follows:2Yvonne Plc GH¢15,000Wett Plc GH¢20,000By the end of 2018, goodwill impairment losses totaled GH¢4,000.What is the carrying amount of goodwill in the consolidated statement of financial position at 31 December 2018 ?
The following is an extract from the trial balance of Tempo Ltd on 30 June 2022:£Land and buildings 114 000Equipment 210 000Investment (80 000 shares of £1 each in Rhythm Ltd at cost price) 650 000Inventory (30/6/2008 - £382 000) 418 000Trade receivables (30/6/2021 – £180 000) 206 000Cash and cash equivalents 92 000Share capital:Ordinary share capital including premium 450 000Preference share capital 200 000Retained earnings:Balance – beginning of year 160 000Retained profit for the year 40 00012% Long term loan 420 000Trade payables (30/6/2021 – £190 000) 210 000Tax payable 110 000Dividends payable 100 000Additional information:1. Issued share capital:- 400 000 ordinary shares of £1 each- 40 000 10% preference shares of £5 each.2. Gross profit for the year amounted to £1 344 000 and represents 40% of turnover for the year.3. All sales and all purchases are on credit.4. Income from investment for the year amounted to £24 000.5. The dividends payable represents the total amount of…
The Wondai Ltd Croup reports the following balances in its consolidated financial statements for the year ending 30 June Financial year 2018 $ 2017 $ Buildings 524,000 268,000 ACC Depr. - Buildings 190,000 143,000 Depr Expense - Buildings 50,000 23,000 On1 July 2017. the Wondai Ltd Group acquired 80%. the shares in Yallingup Ltd. which recorded the following account balances at that date: 1 July 2017 $ Buildings 80,000 Acc Depr.- Buildings 32,000 During the year ended 30 June 2018, the Wondai Ltd Group disposed of buildings with a carrying. amount of $63,000 Required: Calculate the amount of consolidated cash flows from investing activities in relation to the purchase of buildings for the year ending 30 June 2018
Aman Jaya Property Bhd (AJPB) is a medium size property developer company that is listed in the Bursa Malaysia. On 1 January 2017, APJB acquired 10,000 quoted shares of Selayang Manufacturing Berhad (SMB) at RM5 per share through cash. Transaction cost that AJPB incurred was RM1,000. The fair value of each of this share on 31 December 2017 was RM5.50. SMB shares were eventually sold for RM60,000 in October 2018. On 31 December 2018, AJPB issued bonds for total consideration of RM12 million. AJPB incurred transaction cost for RM50,000. The face value of the bond is RM14 million. Required: Prepare an extract of AJPB’s Statement of Profit or Loss and Statement of Financial Position at the end of 2017 and 2018 year
Accounting Corelli Ltd acquired all the shares of Handel Ltd on 1 July 2016. During the year 1 July 2016 to 30 June 2017 the following transactions take place between Handel and Corelli: a) Handel has a $400 000 loan from Corelli Ltd, at an annual interest of 10% (the loan was taken on 1 July 2016). Accruals of Corelli Ltd include $15 000 loan interest due from %3D Handel Ltd. b) The parent charged a $9 000 management fee. All of this was paid by 30 June 2017. c) Dividends declared by Handel amount to $30 000 and Corelli, $90 000. All dividends were yet to be paid out. Required: Prepare journal entries required on consolidation to eliminate the intra-group transactions as of 30 June 2017, assuming a tax rate of 30%.
Q.10. Share capital of Tomato Ltd at 31 March 2017 was as follows: 100,000 ordinary shares at an issue price of $4 each paid to $2. `At that date, a further call of $2 on ordinary shares was made. During the 3 months to 30 June 2017, all calls were duly received except those on 5000 ordinary shares which were forfeited as at 30 June 2017. To bring capital back to the original amount of issued capital, the forfeited shares were offered to an investment company at a price of $3.50 per share paid to $4 and the transfer was completed on 30 September 2017. According to the company’s constitution, shareholders’ equity in forfeited shares must be refunded to them. On 31 October, the previous owner of forfeited shares received a refund cheque for the amount due, less selling costs of $720. Required Show journal entries to implement the above transactions.
The share capital of Tarik Bhd as at 1 January 2018 consisted of 40000000 ordinary shares of RM 40000000. During the year, Tarik Bhd made the following transactions: 30 April 2018, Tarik Bhd bought back 10000000 of its shares from the open market at the prevailing market price of RM 8 per share. These shares were held as treasury shares. On 30 October 2018, Tarik Bhd sold 6000000 treasury shares in the open market price at an average price of RM 10 per share. In 2017, Tarik Bhd issued 4000000 units of warrants to bond holders that entitle the holders to subscribe for ordinary shares of the company. Each unit of warrant entitles its holder to one ordinary share at an exercise price of RM 6 per share. As at 31 December 2018, none of the warrants have been exercised. The average market price of Tarik Bhd’s ordinary shares for the year was RM 9 and this can be assumed as their fair value. The profit after tax for the year ended 31 December 2018 is RM 96000000. Calculate basic &…

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