Below are the statements of financial position of H Ltd and S Ltd as at 31...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Below are the statements of financial position of H Ltd and S Ltd as at 31 December 2010: H Ltd S Ltd Non-current assets $000 5000 Property, plant and equipment 100 140 Investments in S at cost 180 280 140 Current assets Inventory Trade receivables Cash Total assets Equity and liabilities Equity Share capital Share premium Retained earnings Non-current liabilities 10% loan notes Current liabilities 30 35 20 10 10 5 340 190 200 100 10 30 40 20 250 150 65 25 40 Total equity and liabilities 340 190 1. H Ltd bought 80% shares in S Ltd in 2010 2. H Ltd's accounts show $6,000 owing to S Ltd; S Ltd's accounts show $8,000 owed by H Ltd. The difference is explained as cash in transit. 3. S Ltd transferred goods to H Ltd at a transfer price of $18,000 at a mark-up of 50%. Two-thirds remained in inventory at the year end. 4. H Ltd transfers an item of plant to its subsidiary (S Ltd) for $6,000 at the start of 2010. The plant originally cost of $10,000 and had an original useful economic life of 5 years when purchased 3 years ago. The useful economic life of the asset has not changed as a result of the transfer. Required: 1. Calculate the goodwill based on the given information. 2. Calculate the unrealized profit on the transaction at the end of the year of transfer (2010). 3. Prepare elimination entry(ies) based on the given information Below are the statements of financial position of H Ltd and S Ltd as at 31 December 2010: H Ltd S Ltd Non-current assets $000 5000 Property, plant and equipment 100 140 Investments in S at cost 180 280 140 Current assets Inventory Trade receivables Cash Total assets Equity and liabilities Equity Share capital Share premium Retained earnings Non-current liabilities 10% loan notes Current liabilities 30 35 20 10 10 5 340 190 200 100 10 30 40 20 250 150 65 25 40 Total equity and liabilities 340 190 1. H Ltd bought 80% shares in S Ltd in 2010 2. H Ltd's accounts show $6,000 owing to S Ltd; S Ltd's accounts show $8,000 owed by H Ltd. The difference is explained as cash in transit. 3. S Ltd transferred goods to H Ltd at a transfer price of $18,000 at a mark-up of 50%. Two-thirds remained in inventory at the year end. 4. H Ltd transfers an item of plant to its subsidiary (S Ltd) for $6,000 at the start of 2010. The plant originally cost of $10,000 and had an original useful economic life of 5 years when purchased 3 years ago. The useful economic life of the asset has not changed as a result of the transfer. Required: 1. Calculate the goodwill based on the given information. 2. Calculate the unrealized profit on the transaction at the end of the year of transfer (2010). 3. Prepare elimination entry(ies) based on the given information
Expert Answer:
Answer rating: 100% (QA)
1 Goodwill Share Capital of S Ltd Share Premium of S Ltd Retained Earning... View the full answer
Related Book For
Financial Accounting for Decision Makers
ISBN: 978-0273763451
6th Edition
Authors: Peter Atrill, Eddie McLaney
Posted Date:
Students also viewed these accounting questions
-
The following are the statements of financial position of Garden plc, its subsidiary Rose Ltd and its associate Petal Ltd: On 1 January 20X3 Garden plc acquired 75% of Rose Ltd for £300,000...
-
Below are the statements of financial position of three companies as at 31 December 2017. Bauble Jewel Gem Co Co Co GHS000 GHS000 GHS000 Non-current assets Property, plant and equipment 720 60 75...
-
Below are the statements of financial position as at 31st December 2020 of four entities, all of whom prepare their financial statements in accordance with International Accounting Standards: Non...
-
Which of these is not a feature of the AES encryption cipher? Question 4 1 4 1 Answer a . . Its fast execution time. b . . Its use of Feistal networks. c . . Its ease of use in common programming...
-
Determining the amount of cash payments for selling and administrative expenses JensiBerger, managing partner of Berger Business Consulting, is preparing a budget for January 2013, the first month of...
-
Jeffrey Vaughn, president of Frame-It Company, was just concluding a budget meeting with his senior staff. It was November of 20x0, and the group was discussing preparation of the firm's master...
-
Consider your own financial situation and determine whether any of the warning signs of debt problems might apply to you or to someone you know. Analyze what you might do to correct them or how you...
-
Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. (For specific identification, the March 9 sale consisted of 80 units...
-
The Bradford Company issued 14% bonds, dated January 1, with aface amount of $84 million on January 1, 2024.The bonds mature on December 31, 2033 (10 years).For bonds of similar risk and maturity, 2...
-
For the system shown in Figure P5.13, find the poles of the closed-loop transfer function, T(s) = C(s)/R(s). 3 C(s) 5s R(s) 4 FIGURE P5.13
-
(9) The lines r n + = 0, r n2 + c2 = 0 meet at the point A. Find the equation of the line through A which is at right angles to the line r n + q = 0. (10) If ABC is a triangle whose position vectors...
-
Write a summary on the subject of visual arts, in which it defines the purpose and language of the visual arts. Include the following: A definition of the visual arts A discussion of the visual arts...
-
Carla Vista Co. acquired 25% of the 520,000 shares of outstanding common stock of Vaughn Inc. on December 31, 2025. The purchase price was $3,679,000. Vaughn declared and paid $1.30 per share cash...
-
o How did you initially make decisions about how to structure your weekly schedule? o Describe experience of using your weekly schedule. Did you follow it consistently (why or why not?) What...
-
Which of the following is considered a drawback of the transformational leadership style? People may naively believe that their leader's confidence and passion will always translate to a positive...
-
Discuss ways that visual arts impact learning and cognition. How do you plan to incorporate the visual arts into your future classroom?
-
The number of discharge days for a patient admitted January 23 to February 13 is
-
Suppose the government bond described in problem 1 above is held for five years and then the savings institution acquiring the bond decides to sell it at a price of $940. Can you figure out the...
-
Fill in the values (a) to (f ) in the following table on the assumption that there were no opening balances involved. At end of period Relating to period Accruals/deferred Paid/Received...
-
Identify and discuss three ratios (apart from those already mentioned in the chapter) that are likely to be affected by a business overtrading.
-
What is a preference share? Compare the main features of a preference share with those of (a) An ordinary share; and (b) Loan notes.
-
Using the Internet, write a paper about Ber- nard Madoff's ponzi scheme. Include Shawn Merriman and Andrew Hamilton Williams, Jr. in your discussion.
-
Search for the latest about Robert Allen Stan- fords' alleged ponzi scheme.
-
From the following selected balances of Filo plc as at 31 March 2005 draw up (i) a detailed trading and profit and loss account for internal use, and (i) a profit and loss account for publication....
Study smarter with the SolutionInn App