TAILIEUCHUNG - The solutions manual for advanced financial accounting_10

Tham khảo tài liệu 'the solutions manual for advanced financial accounting_10', tài chính - ngân hàng, kế toán - kiểm toán phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | Chapter 13 Business combinations and goodwill 393 You are required to discuss the above statement stating with reasons whether there is a need for two different methods. CIMA Advanced Financial Accounting May 1994 15 marks The balance sheets of Left plc and Right plc at 31 December 1999 the accounting date for both companies were as follows. Left plc Right plc 000 000 Tangible fixed assets 60 000 40 000 Stocks 10 000 9000 Other current assets 12 000 10 000 Current liabilities 9 000 8 000 Quoted debentures 15 000 12 000 58 000 39 000 Equity share capital 1 shares 30 000 20 000 Share premium account 10 000 5000 Profit and loss account 18 000 14 000 58 000 39000 On 31 December 1999 Left plc purchased all the equity shares of Right plc. The purchase consideration was satisfied by the issue of 6 new equity shares in Left plc for every 5 equity shares purchased in Right plc. At 31 December 1999 the market value of a Left plc share was and the market value of a Right plc share was . Relevant details concerning the values of the net assets of Right plc at 31 December 1999 were as follows The fixed assets had a fair value of million. The stocks had a fair value of million. The debentures had a market value of 11 million. Other net assets had a fair value that was the same as their book value. The effect of the purchase of shares in Right plc is NOT reflected in the balance sheet of Left plc that appears above. Requirements a Prepare the consolidated balance sheet of the Left plc group at 31 December 1999 assuming the business combination is accounted for as an acquisition and as a merger. 14 marks b Discuss the extent to which the business combination satisfies the requirements of FRS 6 - Acquisitions and mergers for classification as a merger. You should indicate the other information you would need to enable you to form a definite conclusion. 6 marks CIMA Financial Reporting May 2000 20 marks AB a public limited company manufactures goods for .

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