The following are the summarised statements of financial position of North Ltd and South Ltd as...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The following are the summarised statements of financial position of North Ltd and South Ltd as at 31 December 2020 : Statements of Financial Position as at 31 December 2020 North South Ltd Ltd ASSETS $m $m Non-current assets Property, plant and equipment 425 288 Investments 147 13 572 301 Current assets Inventories 88 73 Accounts receivable 147 106 Other current assets 37 22 Cash and cash equivalents 36 15 308 216 880 517 EQUITY AND LIABILITIES Equity Ordinary shares 300 150 45 $0.2 Preference shares Retained profits 157 90 457 285 Non-current liabilities 150 82 Current liabilities 154 46 30 24 Accounts payable Dividends payable Tax payable Bank overdraft 89 55 = 25 273 150 423 232 880 517 The following additional information is available: 1. South Ltd has 150 million ordinary shares and 45 million preference shares in issue. There has been no change in the number of issued shares for the company. 2. On 1 January 2018 North Ltd purchased 90 million ordinary shares in South Ltd paying a total of $120 million. The retained profits of South Ltd on 1 January 2018 were $30 million. 3. All the assets and liabilities of South Ltd were reported on its balance sheet at fair values as at 1 January 2018 except for a machine, with a remaining useful life of 5 years, whose fair value exceeded its carrying amount by $20 million. 4. Since 1 January 2018 the directors of North Ltd consider that the amount paid for as goodwill upon the acquisition has been impaired by $3 million. 5. South Ltd declared dividend on 1 December 2020 at the following rate: Ordinary dividend - $0.1 per Preference dividend - $0.2 per shares. North Ltd has not accounted for the dividend receivable from South Ltd. 6. During the year ended 31 December 2020 North Ltd sold inventory to South Ltd for $25 million. North Ltd earned a uniform margin of 40% on these sales. During the year ended 31 December 2020 South Ltd resold 80% of this inventory. On 31 December 2020 South Ltd had unpaid invoices totalling $18 million payable to North Ltd in respect of these purchases. 7. Each ordinary share in South Ltd carries one vote and there are no other voting rights in the company. 8. Non-controlling interest is valued at proportionate share of the subsidiary's identifiable net assets. Instructions: You are required to prepare the consolidated balance sheet of North Ltd as at 31 December 2020. The following are the summarised statements of financial position of North Ltd and South Ltd as at 31 December 2020 : Statements of Financial Position as at 31 December 2020 North South Ltd Ltd ASSETS $m $m Non-current assets Property, plant and equipment 425 288 Investments 147 13 572 301 Current assets Inventories 88 73 Accounts receivable 147 106 Other current assets 37 22 Cash and cash equivalents 36 15 308 216 880 517 EQUITY AND LIABILITIES Equity Ordinary shares 300 150 45 $0.2 Preference shares Retained profits 157 90 457 285 Non-current liabilities 150 82 Current liabilities 154 46 30 24 Accounts payable Dividends payable Tax payable Bank overdraft 89 55 = 25 273 150 423 232 880 517 The following additional information is available: 1. South Ltd has 150 million ordinary shares and 45 million preference shares in issue. There has been no change in the number of issued shares for the company. 2. On 1 January 2018 North Ltd purchased 90 million ordinary shares in South Ltd paying a total of $120 million. The retained profits of South Ltd on 1 January 2018 were $30 million. 3. All the assets and liabilities of South Ltd were reported on its balance sheet at fair values as at 1 January 2018 except for a machine, with a remaining useful life of 5 years, whose fair value exceeded its carrying amount by $20 million. 4. Since 1 January 2018 the directors of North Ltd consider that the amount paid for as goodwill upon the acquisition has been impaired by $3 million. 5. South Ltd declared dividend on 1 December 2020 at the following rate: Ordinary dividend - $0.1 per Preference dividend - $0.2 per shares. North Ltd has not accounted for the dividend receivable from South Ltd. 6. During the year ended 31 December 2020 North Ltd sold inventory to South Ltd for $25 million. North Ltd earned a uniform margin of 40% on these sales. During the year ended 31 December 2020 South Ltd resold 80% of this inventory. On 31 December 2020 South Ltd had unpaid invoices totalling $18 million payable to North Ltd in respect of these purchases. 7. Each ordinary share in South Ltd carries one vote and there are no other voting rights in the company. 8. Non-controlling interest is valued at proportionate share of the subsidiary's identifiable net assets. Instructions: You are required to prepare the consolidated balance sheet of North Ltd as at 31 December 2020.
Expert Answer:
Answer rating: 100% (QA)
Consolidated Balance Sheet as at 31 December 2020 ASSETS Non Current Ass... View the full answer
Related Book For
International Financial Reporting A Practical Guide
ISBN: 978-1292200743
6th edition
Authors: Alan Melville
Posted Date:
Students also viewed these accounting questions
-
The current sections of Nasreen SA's statements of financial position at December 31, 2016 and 2017, are presented here. Nasreen's net income for 2017 was ¬147,000. Depreciation expense was...
-
The comparative condensed statements of financial position of Garcia SLU are presented below. GARCIA SLU Comparative Condensed Statements of Financial Position December 31 Instructions (a) Prepare a...
-
The comparative condensed statements of financial position of Conard Corporation are presented on the shown below. Instructions (a) Prepare a horizontal analysis of the statement of financial...
-
The property is located at the intersection of two heavily traveled major arteries. It is a new, glass-walled, five-story office building containing 50,000 total square feet-40,000 of which is...
-
The shaft shown in the figure is proposed as a preliminary design for the application defined in Prob. 372, p. 138. The effective centers of the gears for force transmission are shown. The dimensions...
-
The president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm's R&D department. The equipment's basic price is $70,000, and it would...
-
Four independent situations are given below. Assume partners of the existing partnership are Maria Heath and Lisa Curtis. The new partner is Wade Torres. For each situation, prepare the appropriate...
-
Identify each of the following as a characteristic of ABM or lean: 1. Back-flush costing 2. ABC used to assign overhead costs to the product cost 3. ABC integrated with job order or process costing...
-
W2. Are the following pair of events mutually exclusive? Explain. A card is drawn. A is the event "the card is red" and B is the event " the card is an 8
-
The Xiomaras have an adjusted gross income of $137,865. They are looking at a new house that would have a monthly mortgage payment of $1,687. Their annual property taxes would be $7,550 and their...
-
You can use MySQL Workbench to do all but one of the following. Which one is it? a) Change the database privileges for a user b) Add a new user account c) Change a user's login information d) Change...
-
Let S be the surface defined by R(u, v) = (u, u - v, v), where 0 u+ v 6 and 0v 6. a. Compute [[F do where (x, y, z) = (x z, 2y 1, z x). H S b. Determine the mass of S given that the density at each...
-
(a) Objects with masses m1 = 14.0 kg and m2 = 9.0 kg are connected by a light string that passes over a frictionless pulley as in the figure below. If, when the system starts from rest, m2 falls 1.00...
-
Directions Evaluation of Mastercard should include: A discussion of the ratios calculated in relation to the respective financial diagnostic categories (profitability, liquidity, leverage, operating...
-
Which type of merchandise have HP company focused on carrying? Who are target customers? What relationships do these products have with their target customers? What is breadth and depth of...
-
Consider the following information: State of Economy Boom Good Poor Bust Probability of Rate of Return if State Occurs State of Economy Stock A Stock B Stock C .10 .30 .40 .20 .50 .15 .11 .09 .35...
-
a) A light source at x = y = z = 0 emits light pulse to all directions at t = t1. The trajectory of a moving observer is x = vt y = L z = 0 . (1) What are the coordinates of the event in the rest...
-
When the Department of Homeland Security created a color-coded system to prepare government officials and the public against terrorist attacks, what did it do right and what did it do wrong?
-
Wilbern Ltd prepares financial statements to 30 June each year. On 1 March 2017, the company classifies a non-current asset as held for sale. The asset is eventually sold in July 2017. Calculate: (i)...
-
On 1 October 2017 Pumice acquired the following non-current investments: (i) 80% of the equity share capital of Silverton at a cost of £13.6 million. (ii) 50% of Silverton's 10% loan notes at...
-
On 1 January 2019, Crimmock Ltd (which prepares accounts to 31 December) enters into a four-year lease of office machinery. The company is required to make four lease payments of 30,000 and these...
-
For Example 16-1, estimate an average \(\mathrm{H}_{\mathrm{OG}}\) in the stripping section. Then calculate \(\mathrm{n}_{\mathrm{OG}}\) and \(\mathrm{h}_{\mathrm{E}}=\mathrm{H}_{\mathrm{OG}, \text {...
-
In part E of Example 16-2, a HETP value of \(2.15 \mathrm{ft}\) is calculated for the top of the enriching section. Since the average error in individual mass transfer coefficients...
-
A distillation column at \(101.3 \mathrm{kPa}\) is separating a two-phase feed that is \(60.0 \%\) liquid, \(40.0 \mathrm{~mol} \%\) methanol, and \(60.0 \mathrm{~mol} \%\) water. Distillate product...
Study smarter with the SolutionInn App