You are a shareholder in Tyche Insurance plc and have been informed by the company that...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You are a shareholder in Tyche Insurance plc and have been informed by the company that there are two larger companies interested in taking over Tyche Insurance plc. You have received a copy of the Statement of Financial Position of Tyche Insurance plc at March 2020 with some additional information. Statement of financial position of Tyche Insurance plc at 31 March 2020 £'000 £'000 Assets Non-current assets Property, plant and equipment Computers Fixtures and fittings 9 500 2 200 600 Furniture 450 12 750 Current assets Inventory Trade receivables Cash and cash equivalents 220 3 370 1110 4 700 Total assets 17 450 Equity Ordinary shares of £0.80 each Retained earnings Total equity 10 000 3 800 13 800 Liabilities Non-current liabilities Mortgage Bank loan 2 300 500 2 800 Current liabilities Trade payables Other payables 660 190 850 Total liabilities 3 650 Total equity and liabilities 17 450 The additional information states that there had been some changes to asset values after 31 March 2020. • Property was revalued upwards by £1 850 000 Computers were revalued downwards by £600 000 Fixtures and fittings were valued at £380 000 Inventory had a market value of £180 000 One of the larger companies, Zeus plc, a bank, has offered each shareholder in Tyche Insurance plc the following terms: £1.40 cash for every one share held in Tyche Insurance plc. Another insurance company, Apollo plc, has also made an offer for Tyche Insurance plc. Apollo plc has offered shareholders in Tyche Insurance plc the following terms: • for every 10 shares in Tyche Insurance plc, shareholders receive four shares in Apollo plc. The shares in Apollo plc have a nominal value of £1 but are currently trading on the Stock Exchange at a premium of £2.58 per share. The shareholders of Tyche Insurance plc decided to accept the offer from Apollo plc. The takeover took place on 1 May 2020. The statement of financial position of Apollo plc at 30 April 2020 is shown below. Statement of financial position of Apollo plc at 30 April 2020 £'000 £'000 Assets Non-current assets Property, plant and equipment Computers Fixtures and fittings Furniture 52 700 9 500 3 100 1 860 67 160 Current assets Inventory 560 Trade receivables Cash and cash equivalents 18730 5130 24 420 Total assets 91 580 Equity Ordinary shares of £1.00 each General reserve Retained earnings Total equity 50 000 3 500 20 180 73 680 Liabilities Non-current liabilities Mortgage Bank loan 11 590 2 400 13 990 Current liabilities Trade payables Other payables 3 130 780 3910 Total liabilities 17 900 Total equity and liabilities 91 580 Required (f) Prepare the statement of financial position of Apollo plc at 1 May 2020. (g) Evaluate the two offers (from Apollo plc and Zeus plc) for Tyche Insurance plc to decide whether the shareholders of Tyche Insurance plc were correct to accept the offer from Apollo plc. You are a shareholder in Tyche Insurance plc and have been informed by the company that there are two larger companies interested in taking over Tyche Insurance plc. You have received a copy of the Statement of Financial Position of Tyche Insurance plc at March 2020 with some additional information. Statement of financial position of Tyche Insurance plc at 31 March 2020 £'000 £'000 Assets Non-current assets Property, plant and equipment Computers Fixtures and fittings 9 500 2 200 600 Furniture 450 12 750 Current assets Inventory Trade receivables Cash and cash equivalents 220 3 370 1110 4 700 Total assets 17 450 Equity Ordinary shares of £0.80 each Retained earnings Total equity 10 000 3 800 13 800 Liabilities Non-current liabilities Mortgage Bank loan 2 300 500 2 800 Current liabilities Trade payables Other payables 660 190 850 Total liabilities 3 650 Total equity and liabilities 17 450 The additional information states that there had been some changes to asset values after 31 March 2020. • Property was revalued upwards by £1 850 000 Computers were revalued downwards by £600 000 Fixtures and fittings were valued at £380 000 Inventory had a market value of £180 000 One of the larger companies, Zeus plc, a bank, has offered each shareholder in Tyche Insurance plc the following terms: £1.40 cash for every one share held in Tyche Insurance plc. Another insurance company, Apollo plc, has also made an offer for Tyche Insurance plc. Apollo plc has offered shareholders in Tyche Insurance plc the following terms: • for every 10 shares in Tyche Insurance plc, shareholders receive four shares in Apollo plc. The shares in Apollo plc have a nominal value of £1 but are currently trading on the Stock Exchange at a premium of £2.58 per share. The shareholders of Tyche Insurance plc decided to accept the offer from Apollo plc. The takeover took place on 1 May 2020. The statement of financial position of Apollo plc at 30 April 2020 is shown below. Statement of financial position of Apollo plc at 30 April 2020 £'000 £'000 Assets Non-current assets Property, plant and equipment Computers Fixtures and fittings Furniture 52 700 9 500 3 100 1 860 67 160 Current assets Inventory 560 Trade receivables Cash and cash equivalents 18730 5130 24 420 Total assets 91 580 Equity Ordinary shares of £1.00 each General reserve Retained earnings Total equity 50 000 3 500 20 180 73 680 Liabilities Non-current liabilities Mortgage Bank loan 11 590 2 400 13 990 Current liabilities Trade payables Other payables 3 130 780 3910 Total liabilities 17 900 Total equity and liabilities 91 580 Required (f) Prepare the statement of financial position of Apollo plc at 1 May 2020. (g) Evaluate the two offers (from Apollo plc and Zeus plc) for Tyche Insurance plc to decide whether the shareholders of Tyche Insurance plc were correct to accept the offer from Apollo plc.
Expert Answer:
Answer rating: 100% (QA)
Appolo Plc I May 2020 Asset 000 000 Property plant and Equipment 52700 Add aquired 9500 62200 Comput... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
A summary of the statement of financial position of Doxin plc, as at 31 December 20X0, is given below; During 20XI, the company: (i) Issued 200,000 ordinary shares of £1 each at a premium of...
-
You are a shareholder in a public company. The company is proposing to introduce an employee stock option program for its senior executives. Do you think that this proposal is a good idea? In your...
-
In what section of the statement of financial position should the following items appear, and what statement of financial position terminology would you use? a. Treasury shares (recorded at cost). b....
-
An analyst expects that 20% of all publicly traded companies will experience a decline in earnings next year. The analyst has developed a ratio to help forecast this decline. If the company is headed...
-
Using the three keys of opportunity, identify the impact of an enterprise changing accounting software on people, processes, and technology.
-
The brake shoes of your car are made of a material that can tolerate very high temperatures without being damaged. Why is this so?
-
A newbie is out in the field getting ready to balance a fan. The vibration level is severe and predominantly 1 running speed in the radial direction. A trial weight is placed on the fan, and there is...
-
Statham drew a check. The payee indorsed it to Kemp Motor Sales. Statham then stopped payment on the check on the grounds that there was a failure of consideration for the check. Kemp sued Statham on...
-
Need help expanding the questions below. State of Ohio's position on the ban? What legislation if any supports or opposes the ban and or tries to protect smokers in the workplace? How smoking in...
-
Lucas custom blinds, a manufacturer of custom window treatments, has a contract to make, deliver, and install window coverings for three commercial buildings, which will occur over a period of six...
-
You are required to go to Online Portals of ASX and ASIC, explore the data and information in the portals and perform the following tasks: Task 1: Briefly describe the services provided by 3 types of...
-
Describe how the development of alternative models of nonmarital relationships has impacted many areas of substantive law.
-
Identify the six most common dispute resolution options used in divorce cases. What are the primary differences among them (particularly with respect to the role of the attorney)?
-
Identify the primary purposes of a letter of engagement, a letter of nonengagement or declination, and a closing letter.
-
Describe the major distinction in the effect of a religious and a civil divorce or annulment in the United States.
-
True Or False Attorneys who talk openly with their clients are less likely to be sued for negligence when they make mistakes than attorneys who treat their clients in a paternalistic manner.
-
Subject: Accounting Fake experts, please stay away Don't use Chat GPT or any A.I. tools to answer the question please do not copy from anywhere, and give a very brief explanation Answer only in text...
-
Aztec Furnishings makes hand-crafted furniture for sale in its retail stores. The furniture maker has recently installed a new assembly process, including a new sander and polisher. With this new...
-
Explain why not-for-profit organizations don't have an owners' equity section on their balance sheets. What do they have instead? What does that section of the balance sheet represent? How should it...
-
Woking Ltd. is a landscaping company operating in Quebec. For each of the following, explain how much revenue or expense should be reported on the income statement for the month of July. Also explain...
-
Name some products that are sold in a "bundle." What are the challenges accountants face in recognizing revenue if they want to unbundle the products being offered?
-
An extremely intriguing feature of quantum entanglement is a property that has been called the "monogamy of entanglement": a particle can only be maximally entangled with precisely one other...
-
We had mentioned that from the partition function \(Z\), all possible thermodynamical quantities can be determined. In this problem, we will use the harmonic oscillator's partition function of Eq....
-
Let's consider the harmonic oscillator immersed in a heat bath of temperature \(T\). For any Hermitian operator \(\hat{A}\), we can define its thermal average denoted as...
Study smarter with the SolutionInn App