The statements of financial position, as at 31 December 2021, and income statements, for the year ended last 31 December 2021, of Great plc and Small plc are set out below. Great plc bought its shares in Small plc on 1 January last year at which time the latter's share capital was the same as it is currently and the retained earnings balance stood at £35 million. At the time of the acquisition, the fair value of all the assets of Small plc was thought to be the same as that shown in their statement of financial position, except for land whose fair value was thought to be £5 million more than the statement of financial position value. It is believed that there has been no impairment in the value of the goodwill arising on consolidation since 1 January last year. Statements of financial position as at 31 December 2021 Great plc Small plc £m £m ASSETS Non-current assets Property, plant and equipment Land 80 14 Plant 33 20 Vehicles 20 11 133 45 Investment 53 16m shares of S plc 186 45 Current assets Inventories 20 9 Trade receivable 21 6 Cash 17 5 58 20 Total assets 244 65 EQUITY AND LIABILITIES Equity Called-up share capital: ordinary shares of £1 each, fully paid 100 20 Retained earnings 77 40 177 60 Non-current liabilities Borrowings-loan notes 50 Current liabilities Trade payables 17 5 Total equity and liabilities 244 65
The statements of financial position, as at 31 December 2021, and income statements, for the year ended last 31 December 2021, of Great plc and Small plc are set out below. Great plc bought its shares in Small plc on 1 January last year at which time the latter's share capital was the same as it is currently and the retained earnings balance stood at £35 million. At the time of the acquisition, the fair value of all the assets of Small plc was thought to be the same as that shown in their statement of financial position, except for land whose fair value was thought to be £5 million more than the statement of financial position value. It is believed that there has been no impairment in the value of the goodwill arising on consolidation since 1 January last year. Statements of financial position as at 31 December 2021 Great plc Small plc £m £m ASSETS Non-current assets Property, plant and equipment Land 80 14 Plant 33 20 Vehicles 20 11 133 45 Investment 53 16m shares of S plc 186 45 Current assets Inventories 20 9 Trade receivable 21 6 Cash 17 5 58 20 Total assets 244 65 EQUITY AND LIABILITIES Equity Called-up share capital: ordinary shares of £1 each, fully paid 100 20 Retained earnings 77 40 177 60 Non-current liabilities Borrowings-loan notes 50 Current liabilities Trade payables 17 5 Total equity and liabilities 244 65
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
Chapter12: Intangibles
Section: Chapter Questions
Problem 18E
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