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- The following information relates to Midas Ltd, a small but successful investment holdingcompany.(i) In April 2021, Midas Ltd purchased 100,000 £1.00 listed equity shares at a price of £5.00per share. Transactions costs were £5,000. At 31 December 2021, these shares weretrading at £5.30 per share. A dividend of £0.05 per share was received on 30 September2022.(ii) Midas Ltd also has an investment in a five-year bond which was purchased four yearsago.At 31 December 2021, the bond was valued at an amortised cost of £500,000 with a statedand effective interest rate of 8% (current market rates are 10%).This bond will be maturing on 31 December 2022 and Midas Ltd is expecting to receive only80% the principal but not the interest for the last year. Required(a) Show the figures relating to this investment to be included in Midas Ltd's financialstatements at 31 December 2021 on the basis that:(i) The shares were bought for trading(ii) The shares were bought as a source of dividend income and…Select Ltd is registered with an authorised share capital of 300,000 ordinary shares of Ksh.1. The following trial balance was extracted from the books of the company on 31 March 2020, afterthe preparation of the tra ding асcount: Dr Kshs Kshs 200.000 Ordinary share capital, fully paid Land and buildings at cost Sundry debtors Fumiture and fittings at cost General expenses Sundry Creditors Stock at 31 March 2020 Bank Trading account: gross profit Office salaries and expenses Accumulated provision for depreciation on fumiture and fittings Share premium account Advertising and selling expenses Bad debts Provision for doubtful debts Profit andloss account Directors' fees 170.000 38.300 80.000 3.800 25.000 42.000 12.000 98.050 25.000 32.000 20.000 5.000 250 600 12.000 11.300 387,650 387,650 The following information is given: The provision for doubtful debtors is to be adjusted to Kshs 700. i. i. Depreciation is to be provided in respect of fumiture and fittings at 10% per annum on cost.…On 1 July 2021, Mel Ltd took control of the assets and liabilities of Syd Ltd. At this date the statement of financial position of Syd Ltd was as follows: Required Prepare the journal entries in the records of Mel Ltd at 1 July 2021 in each of the following situations, assuming the costs of issuing the shares by Mel Ltd cost $1600. Mel Ltd issued 80 000 shares having a fair value of $2.40 per share in exchange for the net assets of Syd Ltd Mel Ltd issued 80 000 shares having a fair value of $2.00 per share in exchange for the net assets of Syd Ltd. Mel Ltd acquired the shares of Syd Ltd. The agreement was that Mel Ltd would pay the shareholders of Syd Ltd one share in Mel Ltd for every two shares held in Syd Ltd plus $1 in cash for each share held in Syd Ltd. Shares in Mel Ltd have a fair value of $1.80 per share.
- On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltdissued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of EldoradoLtd. The costs of issuing the shares by Quick Buck Ltd cost $1,600.At this date the statement of financial position of Eldorado Ltd was as follows: c Carrying amount Fair valueMachinery $40,000 $67,000Fixtures & fittings 60,000 68,000Vehicles 35,000 35,000 Current assets 10,000 12,000Current liabilities (16,000) (18,000)Total net assets…A. On 1 July 2020, Alba Bhd. acquired 30 per cent of the ordinary shares that carry voting rights at a general meeting of shareholders of Balba, Bhd. for RM300,000.00, For the year ended 30 June 2021. Balba Bhd recognised a profit of RM400,000.00. On 29 June 2021 entity Balha Bhd declared and paid a dividend of RMI50,000.00 for the year 2021. At 30 June 2021 the fair value of Alba's investment in Balba Bhd is RM425,000.00. However, there is no published price quotation for Balha Bhd. On 30 June 2021 Alba Bhd. lost significant influence over Balba Bhd. when it reduced its sharcholding in Balba Bhd to 15 per cent by selling half of its shares in Balba Bhd. to an independent third party for RM212,500.00. Transaction costs of RM5,000.00 were incurred in selling the shares. REQUIRED: Calculate the investment for Alba Bhd, and Balba Bhd. using equity method.Koreans Ltd owned 300,000 of Marley Ltd shares. On 31 December 2019, when Koreans' account Investment in Ordinary Shares of Marley Ltd had a carrying value of P5 per share, Koreans distributed these shares to its shareholders as a dividend. Koreans originally paid P8 for each share. Marley has 1,000,000 shares issued, which are traded on a shares exchange. The quoted market price for a Marley share was P7 on the declaration date and P9 on the distribution date. What would be the reduction in Koreans' shareholders' equity as a result of the above transactions? P1,200,000 P1,500,000 P2,400,000 P2,700,000
- Select Ltd is registered with an authorised share capital of 300,000 ordinary shares of Ksh.1. The following trial balance was extracted from the books of the company on 31 March 2020, after the preparation of the trading account:Dr CrKshs KshsOrdinary share capital, fully paid 200,000Land and buildings at cost 170,000Sundry debtors 38,300Furniture and fittings at cost 80,000General expenses 3,800Sundry Creditors 25,000Stock at 31 March 2020…As at 31st March 2019, the paid up share capital of Sitara Ltd is Rs 10,000,000/- divided into 1000,000/- equity shares of Rs 10 each. Of this H ltd is holding 600000/- equity shares and 400000 shares are held by others. On the basis of this given information, answer if Sitara may issue further shares if the Authorized capital is 10,000,000/- with reference to the provisions of the Companies ordinance 1984 and Companies act 2017.Maria Ltd has the following capital structures as at 31/4/2019 ordinary shares capital (400,000 shares) of ksh. 16,000,000 10% prefence share capital of ksh. 2,000,000 14% Bond capital of ksh. 14,000,000 The market price of each ordinary shares as at 31/4/2019 was sh. 40. the firm paid a divinded of sh. 4 for each ordinary shares for the year ended 31/4/2019. The annual growth rate in the divinded is 7%. The corporation tax rate is 30% Compute the cost of equity and Debt Compute the weighted average cost of capital of the firm as at 31/4/2019
- (A) For letters a to d, identify how much to add or deduct from the Investment in Associate account of ABC based on the following transactions or events: a. Dec. 1, 2020 - Bought 3,000 X Corp. shares at P200 per share. The total ordinary shares outstanding of X is 100,000 and each had a par value of P150. b. Jan. 1, 2021 - Bought an additional 15,000 shares of X Corp. for a total price of P3,800,000. The original shares are valued at P250 each. On the same date, ABC started providing essential technical information to X and that both corporations have an interchange of managerial personnel. Significant influence is established. There were no changes in the ordinary shares outstanding. c. Net income reported for the year by the associate was P2,500,000. Adjust net income with data from letter d. d. Dividends declared by X are P2,000,000. It has 90,000 6%, P100-par value preference shares outstanding which are cumulative and participating. No dividends were declared in the previous…Following is a list of investments owned by Martinez Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,200 $9.00 $8.20 FDY Ltd. 2,100 6.50 6.55 CTN Corporation 3,700 7.00 7.60 On January 15, 2021, Martinez sold the shares in CTN Corporation for $8.10 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…Select Ltd is registered with an authorised share capital of 300,000 ordinary shares of Ksh.1. The following trial balance was extracted from the books of the company on 31 March 2020, after the preparation of the trading account: Dr Cr Kshs Kshs Ordinary share capital, fully paid 200,000 Land and buildings at cost 170,000 Sundry debtors 38,300 Furniture and fittings at cost 80,000 General expenses 3,800 Sundry Creditors 25,000 Stock at 31 March 2020 42,000 Bank 12,000 Trading account: Gross Profit 98,050 Office salaries and expenses 25,000 Accumulated provision for depreciation on furniture and fittings 32,000 Share premium account 20,000 Advertising and selling expenses 5,000 Bad debts 250 Provision for doubtful debts 600 Profit and loss account 12,000 Directors’ fees 11,300 387650 387,650 ‘The following information is given: i. The provision for doubtful…
