The balance sheets of Blue Star Plc on 31.12.2012 and 31.12.2011 are provided below. Blue Star reports under IFRS. (All amounts are in )

Balance Sheet	31.12.12	31.12.11
Property plant & equipment NBV	225,000	175,000
Goodwill & other intangibles	62,500	50,000
Trade receivables	75,000	102,500
Cash	25,000	65,000
Total Assets	387,500	392,500
Trade payables	57,500	42,500
Interest payable	12,500	5,000
Tax payable	7,500	5,000
Deferred tax liability	22,500	55,000
Bonds payable	100,000	87,500
Total Liabilities	200,000	195,000
Share capital and premium	137,500	150,000
Retained profit	50,000	47,500
Total Shareholders Equity	187,500	197,500
Total Liabilities and Shareholders Equity	387,500	392,500

You are also given the following information taken from the income statement for 2012. (All amounts are in )

Dividend declared and paid	12,500
Interest expense	5,500
Tax expense	13,750
Earnings before interest and tax	34,250
Corporation tax rate	30%

Blue Star invests heavily in R&D. In the last four years (i.e., 2009-2012) it spent the following amounts on R&D, all of which were immediately expensed in its income statement

():

Year R&D

2009. 6,000
2010. 4,500
2011. 12,750
2012. 9,750

Assume the useful life of an R&D asset is three years and that R&D expenses are incurred evenly throughout the year. Assume that for tax purposes R&D is expensed (giving rise to a deferred tax liability when R&D asset is recognised).

Please round all calculations to one decimal place.

Question 1 (11 points): Calculate the 2011 & 2012 end-of-year balance of goodwill and other intangible assets adjusted for the capitalisation of R&D expense.

Question 2 (11 points): Calculate the 2011 & 2012 end-of-year balance of deferred tax liability adjusted for the capitalisation of R&D expense.

Question 3 (11 points): Calculate ROA (return on assets) for 2012 adjusted for the capitalisation of R&D expense.

The balance sheets of Blue Star Plc on 31.12.2012 and 31.12.2011 are provided below. Blue Star reports under IFRS. (All amounts are in ) Balance Sheet Property plant & equipment NBV Goodwill & other intangibles Trade receivables Cash Total Assets Trade payables Interest payable Tax payable Deferred tax liability Bonds payable Total Liabilities Share capital and premium Retained profit Total Shareholders' Equity Total Liabilities and Shareholders' Equity 31.12.12 31.12.11 225,000 175,000 62,500 50,000 75,000 102,500 25,000 65,000 387,500 392,500 57,500 42,500 12,500 5,000 7,500 5,000 22,500 55,000 100,000 87,500 200,000 195,000 137,500 150,000 50,000 47,500 187,500 197,500 387,500 392,500 You are also given the following information taken from the income statement for 2012. (All amounts are in ) You are also given the following information taken from the income statement for 2012. (All amounts are in ) Dividend declared and paid Interest expense Tax expense Earnings before interest and tax Corporation tax rate 12,500 5,500 13,750 34,250 30% Blue Star invests heavily in R&D. In the last four years (i.e., 2009-2012) it spent the following amounts on R&D, all of which were immediately expensed in its income statement (): Year R&D 2009 6,000 2010 4,500 2011 12,750 2012 9,750 Assume the useful life of an R&D asset is three years and that R&D expenses are incurred evenly throughout the year. Assume that for tax purposes R&D is expensed (giving rise to a deferred tax liability when R&D asset is recognised). Please round all calculations to one decimal place. Question 1 (11 points): Calculate the 2011 & 2012 end-of-year balance of goodwill and other intangible assets adjusted for the capitalisation of R&D expense. Question 2 (11 points): Calculate the 2011 & 2012 end-of-year balance of deferred tax liability adjusted for the capitalisation of R&D expense. Question 3 (11 points): Calculate ROA (return on assets) for 2012 adjusted for the capitalisation of R&D expense