On 1st January 2021, TNT Plc bought 27,000,000 ordinary shares of the shares of RWT Ltd. At this date. Statements of Financial Position as at 31 December 2021: TNT Plc RWT Ltd £000 £000 Non-Current Assets Property, Plant and Equipment at NBV 196,875 90,000 Investments in RWT Ltd 18,375 215,250 90,000 Current Assets 56,625 24,000 Total assets 271,875 114,000 Current Liabilities 43,890 15,000 Long Term Loans 105,000 30,000 Total Liabilities 148,890 45,000 Equity Share Capital (£0.4 share) 30,000 45,000 Share Premium 45,000 15,000 Retained Earnings 47,985 9,000 Total equity 122,985 69,000 Total Liabilities and equity 271,875 114,000 You are also given the following information: 1. The fair values of the non-current assets of RWT Ltd at 1 January 2021 were £99,000,000 as compared with their book value of £99,000,000. 2. RWT’s retained earnings at 1 January 2021 were £6,000,000. Required Calculate total non-current assets and retained earnings number that should be reported in TNT’s consolidate statement Of financial position. Critically evaluate the accounting for Property, Plant and Equipment under IAS 16 “Property, Plant and Equipment”
On 1st January 2021, TNT Plc bought 27,000,000 ordinary shares of the shares of RWT Ltd. At this date. Statements of Financial Position as at 31 December 2021: TNT Plc RWT Ltd £000 £000 Non-Current Assets Property, Plant and Equipment at NBV 196,875 90,000 Investments in RWT Ltd 18,375 215,250 90,000 Current Assets 56,625 24,000 Total assets 271,875 114,000 Current Liabilities 43,890 15,000 Long Term Loans 105,000 30,000 Total Liabilities 148,890 45,000 Equity Share Capital (£0.4 share) 30,000 45,000 Share Premium 45,000 15,000 Retained Earnings 47,985 9,000 Total equity 122,985 69,000 Total Liabilities and equity 271,875 114,000 You are also given the following information: 1. The fair values of the non-current assets of RWT Ltd at 1 January 2021 were £99,000,000 as compared with their book value of £99,000,000. 2. RWT’s retained earnings at 1 January 2021 were £6,000,000. Required Calculate total non-current assets and retained earnings number that should be reported in TNT’s consolidate statement Of financial position. Critically evaluate the accounting for Property, Plant and Equipment under IAS 16 “Property, Plant and Equipment”
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 14RE
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Question
On 1st January 2021, TNT Plc bought 27,000,000 ordinary shares of the shares of RWT Ltd. At this date.
Statements of Financial Position as at 31 December 2021:
| TNT Plc | RWT Ltd | |
| £000 | £000 | |
| Non-Current Assets | ||
| Property, Plant and Equipment at NBV | 196,875 | 90,000 |
| Investments in RWT Ltd | 18,375 | |
| 215,250 | 90,000 | |
| Current Assets | 56,625 | 24,000 |
| Total assets | 271,875 | 114,000 |
| Current Liabilities | 43,890 | 15,000 |
| Long Term Loans | 105,000 | 30,000 |
| Total Liabilities | 148,890 | 45,000 |
| Equity | ||
| Share Capital (£0.4 share) | 30,000 | 45,000 |
| Share Premium | 45,000 | 15,000 |
| 47,985 | 9,000 | |
| Total equity | 122,985 | 69,000 |
| Total Liabilities and equity | 271,875 | 114,000 |
You are also given the following information:
1. The fair values of the non-current assets of RWT Ltd at 1
January 2021 were £99,000,000 as compared with their book value of £99,000,000. 2. RWT’s retained earnings at 1 January 2021 were £6,000,000.
Required
- Calculate total non-current assets and retained earnings number that should be reported in TNT’s consolidate
statement Of financial position . - Critically evaluate the accounting for Property, Plant and Equipment under IAS 16 “Property, Plant and Equipment”
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