On 1st January 2021, TNT Plc bought 27,000,000 ordinary shares of the shares of RWT Ltd. At
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Question:
On 1st January 2021, TNT Plc bought 27,000,000 ordinary shares of the shares of RWT Ltd. At this date.
Statements of Financial Position as at 31 December 2021:
TNT Plc | RWT Ltd | |
£000 | £000 | |
Non-Current Assets | ||
Property, Plant and Equipment at NBV | 196,875 | 90,000 |
Investments in RWT Ltd | 18,375 | |
215,250 | 90,000 | |
Current Assets | 56,625 | 24,000 |
Total assets | 271,875 | 114,000 |
Current Liabilities | 43,890 | 15,000 |
Long Term Loans | 105,000 | 30,000 |
Total Liabilities | 148,890 | 45,000 |
Equity | ||
Share Capital (£0.4 share) | 30,000 | 45,000 |
Share Premium | 45,000 | 15,000 |
Retained Earnings | 47,985 | 9,000 |
Total equity | 122,985 | 69,000 |
Total Liabilities and equity | 271,875 | 114,000 |
You are also given the following information:
1. The fair values of the non-current assets of RWT Ltd at 1
January 2021 were £99,000,000 as compared with their book value of £99,000,000. 2. RWT’s retained earnings at 1 January 2021 were £6,000,000.
Required
- Calculate total non-current assets and retained earnings number that should be reported in TNT’s consolidate statement Of financial position.
- Critically evaluate the accounting for Property, Plant and Equipment under IAS 16 “Property, Plant and Equipment”
Related Book For
Government and Not for Profit Accounting Concepts and Practices
ISBN: 978-1118983270
7th edition
Authors: Michael Granof, Saleha Khumawala, Thad Calabrese, Daniel Smith
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