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 competencyevaluate the proper accounting for

Question: Competency Evaluate the proper accounting for transactions with respect to interim and segment reporting using the accounting codification and other accounting research tools. Scenario: CM Corporation (CMC) was ...

Question - beyer company is considering the purchase of an

Question - Beyer Company is considering the purchase of an asset for $180,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer requires a 9% return ...

Question - ross company had the following inventory at the

Question - Ross Company had the following inventory at the end of the year:   Quantity Unit Price Cost Market Valves:       Model Q 180 $11 $9 Model R 150 10 12 Model S 120 7 9 Gaskets:       Model Alpha 60 100 105 Model ...

Question - on may 15 2016 the smoky bear company inventory

Question - On May 15, 2016 the Smoky Bear Company inventory storage facility was completely destroyed in a fire. Offsite accounting records reflect the normal gross profit rate is 40% of sales. Sales to the date of the f ...

Questions -q1 our company uses the percentage of sales

Questions - Q1. Our company uses the percentage of sales method to estimate bad debt expense for the year. Our allowance for bad debts account has a debit balance of $1,000 prior to the adjusting entry for bad debt expen ...

Question - paulson company issues 6 four-year bonds on

Question - Paulson Company issues 6%, four-year bonds, on December 31, 2017, with a par value of $200,000 and semiannual interest payments. Semiannual Period-End Unamortized Discount Carrying Value (0) 12/31/2017 $ 13,46 ...

Question - daniels adjusted gross income is 90000 during

Question - Daniel's adjusted gross income is $90,000. During the year he incurred $18,000 of medical expenses and was reimbursed for $3,000 of these expenses. What is his allowable medical expense deduction if he is age ...

Question - lois braggs owns a small restaurant in boston ms

Question - Lois Braggs owns a small restaurant in Boston. Ms. Bragg provided her accountant with the following summary information regarding expectations for the month of June. The balance in the cash account as of May 3 ...

Accounting question - a comparative balance sheet for

Accounting Question - A comparative balance sheet for Halper Corporation appears on the next page, and the statement of cash flows form follows. Explain below, why you must convert from an accrual basis of accounting to ...

Question - books and brew bb is a large city bookstore that

Question - Books and Brew (BB) is a large city bookstore that sells books and music CD's, and also has a cafe. Currently, BB uses a single-driver system to allocate its operating costs to each of its three product lines, ...

  • 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