Question
Kindly check the attachments and answer all the questions! 1). State whether each of the following statements is true or false, giving reasons for your
Kindly check the attachments and answer all the questions!
1).
State whether each of the following statements is true or false, giving reasons for your
answers:
(i)
The statement of profit or loss shows the cash generated by a company over the
last year.
(ii) It is possible to calculate the market value of the shareholders' interest in a
company from data shown in its statement of financial position.
(iii) A change in accounting policy that reduces a company's depreciation charge by
1 million will usually increase the post-tax profits attributable to ordinary
shareholders by 1 million.
(iv) A provision is a potential liability which had not materialised as a liability by the
date of the statement of financial position, eg payments that might become due
in respect of guarantees given to banks, or goods sold under warranty.
2).
A quick survey of 1,000 children in a refugee camp produced the following results:
320 children were fed on beans
200 children were fed on rice.
450 children were fed on potatoes.
150 children were fed on beans and potatoes.
70 children were fed on beans and rice.
100 children were fed on rice and potatoes.
300 children were fed on none of the three types of food.
Required:
(i)
Present the above information in the form of a Venn diagram.
(ii)
The number of children who were fed on all the three types of food.
(iii) The number of children who were fed on exactly one of the three types of food.
(iv) The number of children who were fed on at least two types of food.
3.
How does a commercial bank reconcile the need for security, liquidity and
profitability in distribution of the assets?
4.
Company A takes over Company B. Immediately before the take-over, Company B's
statement of financial position appeared as follows:
Company B 000s
Non-current assets 240
Current assets 190
Ordinary share capital (10p shares) 60
Reserves 250
Long-term debt 120
The terms of the offer made to B's shareholders for every nine shares held in B were:
?
3 shares (50p market value each) in A plus
?
90p cash plus
?
2 2 convertible preference shares in A (valued at par).
The terms of the conversion on the 2 preference shares are 5 ordinary shares for each
2 preference share.
Calculate the goodwill which will initially appear in A's consolidated accounts as a
result of the offer assuming:
(i) conversion does not take place
(ii) full conversion
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