On 1 January 2016 NO Plc hired a machine under a lease arrangement The cash price of the machine was GHS3.5m and the present value of the minimum lease payments was GHS3.3m. Instalments of GHS700,000 are payable annually in advance with the first payment made on 1 January 2016. The interest rate implicit in the lease is 6%. What amount will appear under non- current liabilities in respect of this lease in the statement of financial position of NO Plc at 31 December 2017? A company acquired an item of plant under a lease arrangement on 1 April 2017. The present value of the minimum lease payments was GHS15.6m and the rentals are GHS6m per annum paid in arrears for three years on 31 March each year. The interest rate implicit in the lease is 8% per annum. What amount will appear under current liabilities in respect of this lease in the statement of financial position at 31 March 2018? and a credit balance of GHS5.4m on deferred tax. The tax charge for the current year is estimated at GHS16.2m and the carrying amounts of net assets are GHS13m in excess of their tax base. The income tax rate is 30%. What amount will be shown as income tax in the statement of profit or loss for the year? expense 4 The statements of financial position of NO Plc inclun9de the following extracts: Statements of financial position as at 30 September 2021 GHSm 2020 GHSm Non-current liabilities Deferred tax 310 140 Current liabilities Taxation 130 160 The tax charge in the statement of profit or loss for the year ended 30 September 2021 is GHS270m. What amount of tax was paid during the year to 30 September 2021? 5 A company's trial balance at 31 December 2021 shows a debit balance of GHS700,000 on current tax and a credit balance of GHS8,400,000 on deferred tax. The directors have estimated the provision for income tax for the year at GHS4.5m and the required deferred tax provision is GHS5.6m, GHS1.2m of which relates to a property revaluation. What is the profit or loss income tax charge for the year ended 31 December 2021? 6The statements of financial position of NO Plc included the following. Statements of financial position as at: Current assets Income tax asset Non-current liabilities Deferred tax Current liabilities Income tax payable 31 March 2022 31 March 2021 GHS'000 GHS'000 50 50 30 150 The profit or loss income tax charge for the year ended 31 March 2022 is estimated at GHS160,000. What amount of income tax has been received or paid during the year ended 31 March 2022? 7 Which of the following are not classified as financial instruments under IAS 32 Financial instruments: presentation? A Share options B Intangible assets C Trade receivables D Redeemable preference shares 8 An 8% GHS30m convertible loan note was issued on 1 April 2021 at par. Interest is payable in arrears on 31 March each year. The loan note is redeemable at par on 31 March 2024 or convertible into equity shares at the option of the loan note holders on the basis of 30 shares for each GHS100 of loan. A similar instrument without the conversion option would have an interest rate of 10% per annum. The present values of GHS1 receivable at the end of each year based on discount rates of 8% and 10% are: End of year 1 2 3 8% 10% 0.93 0.91 0.86 0.83 0.79 0.75 What amount will be credited to equity on 1 April 2021 in respect of this financial instrument? 9 MN Plc's draft statement of financial position as at 31 March 2022 shows financial assets at fair value through profit or loss with a carrying amount of GHS12.5m as at 1 April 2021. These financial assets are held in a fund whose value changes directly in proportion to a specified market index. At 1 April 2021 the relevant index was 1,200 and at 31 March 2022 it was 1,296. What amount of gain or loss should be recognised at 31 March 2022 in respect of these assets? ets. int ven n to 10 UV Plc had 10m ordinary shares in issue throughout the year ended 30 June 2020. On 1 July 2019 it had issued GHS2m of 6% convertible loan stock, each GHS5 of loan stock is convertible into 4 ordinary shares on 1 July 2023 at the option of the holder. UV Ple had profit after tax for the year ended 30 June 2020 of GHS1,850,000. It pays tax on profits at 30%. What was diluted EPS for the year? 11. House Plc owns 80% of the issued share capital of Window Plc and 25% of the issued share capital of Door Plc. The revenues for the year are as follows: House Plc Window Plc Door Plc GH375,000 GH250,000 GH40,000 What amount for revenue should appear in the consolidated statement of profit or loss for the year? 12 Grace Plc holds 80% of the ordinary shares of Paul Plc and 40% of those of Peter Plc. The three companies' profits after tax for 2017 financial year, before accounting for dividends received, and their total dividends paid for the year are as follows: Grace Plc Paul Plc Peter Plc Profit after tax Dividend paid GH GH 40,000 20,000 40,000 20,000 40,000 20,000 In Grace Plc's consolidated statement of profit or loss, what amount will be disclosed as the profit for the year [before distribution to non-controlling interest]? Use the data below to answer questions 13 and 14 below: Augustine Plc acquired 60% of the ordinary shares of Nyantakyiwa Plc on 1 January 2016 for GHC180,000 on which date the net assets of Nyantakyiwa Plc were GHS250,000. Nyantakyiwa Plc subsequently [on 1 January 2017], acquired 80% interest in Evelyn Ple for GHC 90,000, on which date the net assets of Evelyn was GHC100,000. The policy of the group is to measure non-controlling interest at proportionate share of the net assets of the subsidiary. At 31 December 2017, the goodwill arising from the acquisition was tested for impairment but no impairment loss was to be recognized. 13. Determine the effective interest Augustine Plc has in Evelyn Plc and state whether Augustine can control Evelyn A B C D Effective Interest 48% 48% 80% 60% Control No Yes Yes Yes 14 Determine the consolidation goodwill to be disclosed in the consolidated statement of financial position of Augustine Plc group as at 31 December 2017 15 GCB Bank bought 4 million (out of the 10 million) shares of City Bank in January 2017 from an institutional investor at a cost of GHS12 million. The market price of a share of City bank on that date was GHS2.80. In the year ended 31 December 2017, City bank achieved a profit after tax of GHS3 million out which it declared and paid total interim dividend of GHS1 million in November 2017. In addition to its investment in City Bank, GCB has controlling interests in two savings and loans companies and therefore prepares consolidated financial statements. Determine the amount at which Investment in Associate should be presented in the consolidated statement of financial position as at 31 December 2017. 16. Amma Plc owns many subsidiaries and 25% of Kofi Plc. In the year ended 31 December 2017, Amma Plc sold goods to Kofi Plc for GH200,000, earning a gross profit of 25% on cost. Kofi Plc held GH60,000 of them in its inventories at the year end. By what amount should Amma Plc's cost of sales be increased when preparing its consolidated income statement? 17. Kofi Plc owns 45% of the ordinary shares of Amma Plc. By this shareholding, Kofi Plc has secured the right to participate in the financial and operating decision making process of Amma Plc. How will you describe the relationship between Kofi and Amma? Amma is an associa Use the following information to answer questions 18 and 19 Baba Plc has a 75% owned subsidiary, Salifu Plc. During 2017, Baba Plc sold goods to Salifu Plc for GHS80,000 which was cost plus 25%. At 31 December 2017, GHS40,000 of these goods remained unsold. 18 In the consolidated statement of profit or loss for the year ended 31 December 2017, the revenue will be reduced by: A GHS40,000 B GHS80,000 C GHS30,000 D GHS60,000 19. 25 40,000 125 In the consolidated statement of profit or loss for the year ended 31 December 2017, the gross profit will be reduced by: 20 Nhyira Plc holds 10% investment in Grace Plc at GHC24,000 and accounts for it in line with IFRS 9 at amortised cost. On 1 January 2017 Nhyira acquired a further 50% of Grace Plc's ordinary shares at a cost of GHC160,000. On 1 January 2017, the net assets of Grace were assessed to have total value of GHC 200,000, the NCI was fair valued at GHC100,000 and the 10% previously held was assessed to have a fair value of GHC 26,000. Calculate the Goodwill arising from the acquisition of Grace Plc