3 Orix ltd is one of the leading business group in Sultanate of Oman More than 5000 employees are working in this group With its commitment and strong focus in providing engineering solutions to the Oil Gas, Petrochemicals, Power, Water and Wastewater sectors, Orix ltd Group has been structured into three Strategic Business Units (SBUs) Contracting, Trading Manufacturing With its commitment and strong focus in providing engineering solutions to the Oil Gas, Petrochemicals, Power, Water and Wastewater sectors, Orix Group has been structured into three Strategic Business Units (SBUs) Contracting, Trading Manufacturing Orix ltd has invested RO350,000 in Rahyan ltd The total value of the issued and paid up cpital in Rayhan is RO 1,000,000 The remaining shares except the shares held by Orix ltd is held by other shareholders In January 2019, Arib made an offer to buy all of the shares of Rayhan The offer was not supported Orix ltd On 1 st March 2019, Arib announced that it had acquired the remaining of the share capital of Rayhan Required What method of Accounting Orix has to use to record the investments in Rayhan ltd Why (1 mark) Elucidate how the investment in Rayhan is showed in the Statement of Comprehensive Income of Orix ltd for the year ended 31st March 2019 and the Statement of financial position at 31 st March 2019 (3 marks) On January 1, 2019, Orix issued bonds with a par value of OMR 500,000 at 101, due in 2028 On January 1, 2022, the entire issue was called at 102 and cancelled Interest is paid annually, and the premium is amortized using the straight line method Calculate the profit or loss on the redemption (2 marks) What is the procedure followed to amortize the bonds (2 marks) Orix ltd is a successful business and it has good reputation with the public due to the quality of products it offers in the market On 19 th June 2019, the company offered three types of bonds to the public They are Irredeemable, Callable bonds and Mortgage bonds Investors have the choice of selecting the type of bond issued If you wish to invest in the bonds of Orix Ltd which type of bond you will select to invest Discuss in detail supporting your answer (2 marks)

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 10, 2024

3. Orix ltd. is one of the leading business group in Sultanate of Oman. More than 5000 employees are working in this group. With its

3. Orix ltd. is one of the leading business group in Sultanate of Oman. More than 5000 employees are working in this group. With its commitment and strong focus in providing engineering solutions to the Oil & Gas, Petrochemicals, Power, Water and Wastewater sectors, Orix ltd. Group has been structured into three Strategic Business Units (SBUs): Contracting, Trading & Manufacturing. With its commitment and strong focus in providing engineering solutions to the Oil & Gas, Petrochemicals, Power, Water and Wastewater sectors, Orix Group has been structured into three Strategic Business Units (SBUs): Contracting, Trading & Manufacturing.

Orix ltd has invested RO350,000 in Rahyan ltd. The total value of the issued and paid up cpital in Rayhan is RO 1,000,000. The remaining shares except the shares held by Orix ltd is held by other shareholders. In January 2019, Arib made an offer to buy all of the shares of Rayhan. The offer was not supported Orix ltd . On 1^st March 2019, Arib announced that it had acquired the remaining of the share capital of Rayhan.

Required:

What method of Accounting Orix has to use to record the investments in Rayhan ltd? Why? (1 mark)
Elucidate how the investment in Rayhan is showed in the Statement of Comprehensive Income of Orix ltd for the year ended 31st March 2019 and the Statement of financial position at 31^st March 2019. (3 marks)

On January 1, 2019, Orix. issued bonds with a par value of OMR 500,000 at 101, due in 2028. On January 1, 2022, the entire issue was called at 102 and cancelled. Interest is paid annually, and the premium is amortized using the straight-line method.

Calculate the profit or loss on the redemption. (2 marks)
What is the procedure followed to amortize the bonds? (2 marks)

Orix ltd is a successful business and it has good reputation with the public due to the quality of products it offers in the market. On 19^th June 2019, the company offered three types of bonds to the public. They are Irredeemable, Callable bonds and Mortgage bonds. Investors have the choice of selecting the type of bond issued.