Assets: Non Current Asset Pra GH¢million Bosomtwe GH¢million Ayensu GH¢million Property, Plants and Equipment 720.00 550
Posted: Thu May 26, 2022 8:04 am
Assets:
Non Current Asset
Pra
GH¢million
Bosomtwe
GH¢million
Ayensu
GH¢million
Property, Plants and Equipment
720.00
550.00
650.00
Investment in Subsidiaries
Bosomtwe Ltd
625.00
Ayensu Ltd
155.00
635.00
Financial Assets
160.00
10.50
70.50
1660.00
1195.50
720.50
Current Assets
447.50
340.50
75.00
Total Asset
2107.50
1536.00
795.50
Equity and Liability
Stated Capital
875.00
605.00
400.00
Retained Earnings
620.00
465.00
175.00
Other component of Equity
62.50
40.00
47.50
Total Equity
1557.50
1110.00
622.50
Non-current Liabilities
492.50
382.50
75.00
Current Liabilities
57.50
43.50
98.00
Total Liabilities
550.00
426.00
173.00
Total Equity and Liabilities
2107.50
1536.00
795.50
Additional information:
i) On 1 April 2016, Pra Ltd acquired 14% of the equity interest
of Ayensu Ltd for a cash consideration of GH¢130 million and
Bosomtwe Ltd acquired 70% of the equity interest of Ayensu Ltd for
a cash consideration of GH¢635 million. At 1 April 2016, the
identifiable net assets of Ayensu Ltd had a fair value of GH¢495
million, retained earnings were GH¢95 million and other components
of equity were GH¢26 million. At 1 April 2017, the identifiable net
assets of Ayensu Ltd had a fair value of GH¢575 million, retained
earnings were GH¢120 million and other components of equity were
GH¢35 million. The excess in fair value is due to non-depreciable
land. The fair value of the 14% holding of Pra Ltd in Ayensu Ltd,
which was classified as fair value through profit or loss, was
GH¢140 million at 31 March 2017 and GH¢155 million at 31 March
2018. However, the fair value of Bosomtwe Ltd’s interest in Ayensu
Ltd had not changed since acquisition.
ii) On 1 April 2017, PraLtd acquired 60% of the equity interests
of Bosomtwe Ltd, a public limited liability company in Ghana. The
cost of investment comprised cash of GH¢625 million. On 1 April
2017, the fair value of the identifiable net assets acquired was
GH¢975 million and retained earnings of Bosomtwe Ltd were GH¢325
million and other component of equity were GH¢27.5 million. The
excess in fair value is due to non-depreciable land. It is the
group’s policy to measure the non-controlling interest at
acquisition at its proportionate share of the fair value of the
subsidiary’s net assets.
Required:
Prepare the group consolidated statement of financial position
of PraLtd as at 31 March 2018. (20marks)
b) A company grants 2,000 share options to each of its three
directors on 1 January 2012 subject to the directors being employed
on 31 December 2014. The options vest on 31 December 2014. The FV
of each option on 1 January 2012 is GHC10 and it is anticipated
that all of the share options will vest on 31 December 2014.The
options will only vest if the company’s share price reaches GHC14
per share. The price at 31 December 2012 was GHC8 and it is not
anticipated that it will rise over the next two years. It is
anticipated that there will only be two directors employed on 31
December 2014.
Requirement
How will the share options be treated in the financial
statements for the year ended 31 December 2012?
Required:
How should Abacus Co account for the debt instrument over its
five-year term?
Non Current Asset
Pra
GH¢million
Bosomtwe
GH¢million
Ayensu
GH¢million
Property, Plants and Equipment
720.00
550.00
650.00
Investment in Subsidiaries
Bosomtwe Ltd
625.00
Ayensu Ltd
155.00
635.00
Financial Assets
160.00
10.50
70.50
1660.00
1195.50
720.50
Current Assets
447.50
340.50
75.00
Total Asset
2107.50
1536.00
795.50
Equity and Liability
Stated Capital
875.00
605.00
400.00
Retained Earnings
620.00
465.00
175.00
Other component of Equity
62.50
40.00
47.50
Total Equity
1557.50
1110.00
622.50
Non-current Liabilities
492.50
382.50
75.00
Current Liabilities
57.50
43.50
98.00
Total Liabilities
550.00
426.00
173.00
Total Equity and Liabilities
2107.50
1536.00
795.50
Additional information:
i) On 1 April 2016, Pra Ltd acquired 14% of the equity interest
of Ayensu Ltd for a cash consideration of GH¢130 million and
Bosomtwe Ltd acquired 70% of the equity interest of Ayensu Ltd for
a cash consideration of GH¢635 million. At 1 April 2016, the
identifiable net assets of Ayensu Ltd had a fair value of GH¢495
million, retained earnings were GH¢95 million and other components
of equity were GH¢26 million. At 1 April 2017, the identifiable net
assets of Ayensu Ltd had a fair value of GH¢575 million, retained
earnings were GH¢120 million and other components of equity were
GH¢35 million. The excess in fair value is due to non-depreciable
land. The fair value of the 14% holding of Pra Ltd in Ayensu Ltd,
which was classified as fair value through profit or loss, was
GH¢140 million at 31 March 2017 and GH¢155 million at 31 March
2018. However, the fair value of Bosomtwe Ltd’s interest in Ayensu
Ltd had not changed since acquisition.
ii) On 1 April 2017, PraLtd acquired 60% of the equity interests
of Bosomtwe Ltd, a public limited liability company in Ghana. The
cost of investment comprised cash of GH¢625 million. On 1 April
2017, the fair value of the identifiable net assets acquired was
GH¢975 million and retained earnings of Bosomtwe Ltd were GH¢325
million and other component of equity were GH¢27.5 million. The
excess in fair value is due to non-depreciable land. It is the
group’s policy to measure the non-controlling interest at
acquisition at its proportionate share of the fair value of the
subsidiary’s net assets.
Required:
Prepare the group consolidated statement of financial position
of PraLtd as at 31 March 2018. (20marks)
b) A company grants 2,000 share options to each of its three
directors on 1 January 2012 subject to the directors being employed
on 31 December 2014. The options vest on 31 December 2014. The FV
of each option on 1 January 2012 is GHC10 and it is anticipated
that all of the share options will vest on 31 December 2014.The
options will only vest if the company’s share price reaches GHC14
per share. The price at 31 December 2012 was GHC8 and it is not
anticipated that it will rise over the next two years. It is
anticipated that there will only be two directors employed on 31
December 2014.
Requirement
How will the share options be treated in the financial
statements for the year ended 31 December 2012?
Required:
How should Abacus Co account for the debt instrument over its
five-year term?