DM Ltd is developing a new production process. During 211, expenditure incurred was GH 100,000 of which
Question:
- An advertising campaign has just been completed on behalf of DM Ltd at a cost of GH₵ 75,000. The go-ahead for this campaign was given on the basis of an assurance from the agency used that it would generate GH₵ 200,000 additional profit over the next two years
- On 31 December 2011 DM Ltd acquired the entire share capital of PML for GH₵ 700,000.at the date of acquisition, PML`s statement of financial position showed the following:
Non-current assets:
GH₵
PPE 300,000
Intangibles-Goodwill on acquisition of QRS Enterprise 100,000
400,000
Current Assets 400,000
800,000
Equity 550,000
Current Liability 250,000
All assets and liability are stated at what DM Ltd regards as their fair values
A staff training program has been carried out by DM Ltd at a cost of GH₵ 125,000, the training consultant having demonstrated to the directors that the additional profits to the business over the next 12 months will be GH₵ 200,000
Required;
Calculate the amount which should be recognized as assets in DM Ltd consolidated statement of financial position as at 31 December 2011
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates