Ask Question, Ask an Expert

+61-413 786 465

Ask Accounting Basics Expert

problem: Chambers plc imports household equipment from Germany. On 1 July 2011, the company acquired 60 percent of the ordinary shares of Court Ltd, which owns a chain of retail shops selling household equipment. Draft financial statements of the two companies at 30June 2012 have been prepared as shown below:

Statements of Financial Position:

1832_finacial position.jpg


1) The purchase by Chambers plc of the shares in Court Ltd was financed through the payment of 25p (£0.25) cash per share and by the issue of 1 share in Chambers for every 2 shares in Court. Only the cash component has been accounted for in the draft Statement of Financial Position of Chambers. At the time of acquisition shares in Chambers were trading at 370p per share; shares in Court were at that time valued at 180p. The balance of Court’s retained earnings was £470 million on 30 June 2011. There have been no changes in the ordinary share capital of Court Ltd over the year. Chambers plc intends to use the fair value process to account for goodwill arising on acquisition.

2) When Chambers plc acquired its interest in Court; it valued that company's freehold property at £30 million above its book value. The freehold property had an average remaining useful life of 15 years at that time. Depreciation must be charged to distribution costs.

3) Throughout the year ended 30 June 2012 Court purchased goods from Chambers for £180 million. Of these, items which had cost Court £90 million are still involved in inventory at the year-end. Chambers has a margin on selling price of 30%.

4) Included in Chamber’s trade receivables is a balance due from Court of £60 million. Court’s trade payables include a balance of £20 million due to Chambers. On 30 June 2012 a bank transfer for £40 million had been sent by Court to Chambers. This was not received in Chambers bank account till 1st July.

5) Throughout the year Chambers plc paid a dividend of £340 million and Court Ltd paid a dividend of £100 million. The balance of Chambers retained earnings was £2,260 million at 30th June 2011.

problem: Non-current assets


describe, and critically analyze, the differences among the accounting treatment of self- constructed tangible non-current assets under IAS 16 Property, plant and equipment and internally generated intangible non-current assets under IAS 38 Intangible Assets.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9199

Have any Question? 

Related Questions in Accounting Basics

Question - stewart company purchases store supplies for

Question - Stewart Company purchases store supplies for $2,700, paying 20% of the amount due in cash and agreeing to pay the balance at a later date. Required: What is the effect of this transaction on individual asset a ...

Question - on january 1 year 1 homeland entity he signed a

Question - On January 1, year 1, Homeland Entity (HE) signed a 20-year lease contract for an office building. The lease contract calls for HE to make payments of $10,000 at the beginning of each year, with the first paym ...

Question - please solve with explanation - candy co

Question - Please solve with explanation - Candy Co. purchased a machine on January 1, 2011, for $300,000. At the time of purchase, the machine was estimated to have a life of 8 years and a residual value of $10,000. In ...

Question requirement 1 read the article in below attachment

Question: Requirement: 1. Read the article in below attachment, and answer the questions in a paper format. Read below requirements before your writing! 2. Not to list the answers, and you should write as a paper format. ...

Question - if a company purchases land for 1000000 paying

Question - If a company purchases land for $1,000,000, paying $400,000 cash and borrowing the remainder with a long term note payable. Please give explanation for understanding on how this transaction be reported on a st ...

Question an llc may be taxed in different ways depending on

Question: An LLC may be taxed in different ways depending on the election made on the Form 8832 Entity Classification Election. Using a minimum of 450 words, explain what an LLC is and some of the advantages of this busi ...

Discussion accounts receivablesfinancial accountingaccounts

Discussion: "Accounts Receivables" Financial Accounting Accounts Receivables • What is the importance of the turnover of Accounts Receivables? • Why is it is essential for organizations to keep cash reserves on hands? • ...

Assignment 1 depreciation and nontaxable propertycompanies

Assignment 1: Depreciation and Nontaxable Property Companies buy, use, and sell many types of property as a part of business operations. The amount involved can be substantial as can be the tax implications. Based on you ...

Questions -1 pop corporation paid 100000 cash for the net

Questions - 1. Pop Corporation paid $100,000 cash for the net assets of Son Company, which consisted of the following: Book Value Fair Value Current assets $ 40,000 $ 56,000 Plant and equipment 160,000 220,000 Liabilitie ...

Question - alpha corp was organized on january 2 2018

Question - Alpha Corp was organized on January 2, 2018. During the first year of operation, alpha issued 100,000 shares of $1 par value common stock at a price of $50 cash per share. On December 31, 2018, alpha reported ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As