On 1 June 2019, Manchester United Ltd bought 48 million ordinary shares in Chelsea FC Ltd...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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 Trade receivables 30 34 38 40 Cash and cash equivalents 72 74 Total assets 672 304 EQUITY AND LIABILITIES Equity: Share capital Retained earnings 228 80 378 138 606 218 Non- current liabilities 8% loan stocks 40 Current liabilities Trade payables 66 46 Equity and Liabilities 672 304 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 12 marks December 2019. 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 Trade receivables 30 34 38 40 Cash and cash equivalents 72 74 Total assets 672 304 EQUITY AND LIABILITIES Equity: Share capital Retained earnings 228 80 378 138 606 218 Non- current liabilities 8% loan stocks 40 Current liabilities Trade payables 66 46 Equity and Liabilities 672 304 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 12 marks December 2019.
Expert Answer:
Answer rating: 100% (QA)
1Calculation For goodwill or capital reserve arising on acquisition GHSm Net assets of Chelsea ltd S... View the full answer
Related Book For
Posted Date:
Students also viewed these general management questions
-
The comparative statement of financial position for Baird Corporation shows the following noncash current asset and liability accounts at March 31: _____________________________________ 2015...
-
The comparative statement of financial position for Dupigne Corporation shows the following noncash current asset and liability accounts at March 31: ___________________________________ 2015...
-
The comparative statement of financial position for Dupigne Corporation shows the following noncash current asset and liability accounts at March 31: __________________________2018 2017 Accounts...
-
Using result (8.9), find f(x) when f (x) is (a) x (b) 1/x 5 (c) 1 3x
-
A unity feedback system has a loop transfer function Plot the percent overshoot of the closed-loop system response to a unit step input for K in the range 0 K (s2 2s20) L(s) = Ge(s)G(s) = s(s + 2)(s2...
-
Write a VHDL design entity that implements a 6 64 decoder using 3 8 decoders as building blocks.
-
Estimate the maximum mass flow rate of air that can be passed by the duct shown in Fig. P11.61 for \(\mu=4 \times 10^{-7} \mathrm{lb}\). \(\mathrm{s} / \mathrm{ft}^{2}\). Figure P11.61 Po 100 psia T...
-
The Town of Thomaston has a Solid Waste Landfill Enterprise Fund with the following trial balance as of January 1, 2017, the first day of the fiscal year. During the year, the following transactions...
-
Question 2 a) Draw an annotated sketch showing the main features of the oedometer apparatus. What is this apparatus used for? b) Explain the term "isochrone of excess pore pressure". [6 marks] [4...
-
The commercial loan operation of a financial institution has a standard for processing new loan applications in 24 hours. Table 7E.2 shows the number of applications processed each day for the last...
-
A steel rotating-beam test specimen has an ultimate strength of 120 kpsi. Estimate the life of the specimen (number of cycles, N) if it is tested at a completely reversed stress amplitude of 71 kpsi....
-
Two plastic bowling balls, 1 and 2 , are rubbed with cloth until they each carry a uniformly distributed charge of magnitude \(0.10 \mathrm{nC}\). Ball 1 is negatively charged, and ball 2 is...
-
A positively charged test particle is placed midway between two fixed, identical positively charged source particles. (a) Is the test particle in a stable or unstable equilibrium at that location?...
-
Recall that Programming Exercise 3 in Chapter 8 asked you to design a program that lets the user enter the total rainfall for each of 12 months into an array. The program should calculate and display...
-
Two beads, one carrying charge \(+q\) and the other carrying charge \(+4 q\), are separated by a distance \(d\) that is much greater than the radius of each bead. (a) Is there any location along the...
-
Design an application that has an array of at least 20 integers. It should call a module that uses the sequential search algorithm to locate one of the values. The module should keep a count of the...
-
Hannah owns a call option on a stock. The call option's strike price is $39.50. If the price of the stock is $16.40 on the expiration date, what is the value of the option?
-
Portal Manufacturing has total fixed costs of $520,000. A unit of product sells for $15 and variable costs per unit are $11. a). Prepare a contribution margin income statement showing predicted net...
-
In 2015, Bay City purchased supplies valued at $350,000. At the end of the year, $65,000 of the supplies were still in the inventory. No supplies were on hand at the beginning of the year. The city...
-
On January 1, 2014, Packard Company purchased an 80% interest in Sage Company for $600,000. On this date Sage Company had common stock of $150,000 and retained earnings of $400,000. Sage Company's...
-
On January 1, 2014, Tony and Jon formed T&J Personal Financial Planning with capital investments of $480,000 and $340,000, respectively. The partners wanted to draft a profit and loss agreement that...
-
Determine the longitudinal tensile strength of the hybrid carbon/aramid/ epoxy composite described in Problem 3.4 and Figure 3.10 of Chapter 3 if the fiber packing array is square with the closest...
-
For the IM-9/8551-7 carbon/epoxy composite rod design of Problem 3.3 in Chapter 3, what would be the increase in the longitudinal tensile strength compared with that of the original 6061-T6 aluminum...
-
Assuming that the failure mode for longitudinal compression of unidirectional E-glass/epoxy with fiber volume fraction \(v_{\mathrm{f}}=0.6\) is a transverse tensile rupture due to Poisson strains,...
Study smarter with the SolutionInn App