Financial Reporting Coursework Questions 8

The eighth deadline is 5pm on 13 December for questions 42 - 60

Coursework Question 42

Below are given statements of financial position of Big plc and Little plc. 

Shares in Big plc have a par value of 50p. 

Shares in Little plc have a par value of 25p

Big plc (£m) Little plc (£m)

Non-current assets	3056	50
Current assets	273	15
Share capital	1500	25
Reserves	960	14
Current liabilities	869	26

Calculate the goodwill cost of control for Big plc to take control of Little plc assuming: Big plc's shares are priced at £4.81 and that Little plc's shareholders are offered 1.4 Big plc share for every 1 share in Little plc when Big plc acquires 100% of Little plc

Answer: £ m 

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Coursework Question 43

Subby plc Statement of financial position (extract) 31 March 2011

EQUITY £ m

25p Ordinary share capital	11
Other reserves	5
Retained profits	19
Total equity	35

Holdy plc purchased 37m shares in Subby plc in 2009 at a purchase price of 108p per share. At this time the equity of Subby plc was as follows:

EQUITY £m

25p Ordinary share capital	11
Other reserves	2
Retained profits	5
Total equity	18

Calculate the following:

a) The goodwill cost of control

Answer: £ m 

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Coursework Question 44

Continued from above

b) Holdy plc's share of the additional reserves of Subby plc to be included in the consolidated statements at 31 March 2011

Answer: £ m 

 

Coursework Question 45

A UK company has taxable profits overseas of £900k and UK profits of £1.27m. The overseas rate of CT is 50% whilst the UK rate is 25%. You may assume there is a double taxation agreement in place.
a) How much UK tax is payable

Answer: £ 

 

Coursework Question 46

b) What is the total tax payable?

Answer: £ 

 

 

Coursework Question 47

A UK company has an overseas operation that earns profits of £11.38m.
Tax overseas is 13%.
UK CT is 25%.
Assuming a DT treaty is in place, what DTR can the company claim?

Answer: £ m 

Coursework Question 48

A company has an EBIT of £165000 and is paying interest of £24770 on an unsecured loan stock as well as interest of £25400 on the mortgage secured on the factory. What is the interest cover for the mortgage.

Answer: 

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Coursework Question 49

(Continued from question 48). If interest rates on the unsecured loan and the mortgage are 6.3% and 3.7% respectively and the total assets of the company are worth £2750000 including £300000 on intangibles. Assuming there are no current liabilities, what is the asset cover on the unsecured loan stock?

Answer: 

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Coursework Question 50

Questions 50 to 60 will be based on the following results for Black and White plc as at 31st December 2016:

Income Statement£s

Revenue	943000
Raw materials	(134000)
Wages	(144000)
Depreciation	(64000)
Gross profit
Admin expenses	(93000)
Operating profit
Finance costs
Profit on ordinary activities before taxation
Tax on ordinary activities
Profit on ordinary activities after taxation

A dividend of £17000 was paid during the year

Tax is being budgeted for at the rate of corporation tax of 19%. or 25% (with 0.015 rebate as appropriate). You do need to adjust for depreciation and capital allowances of 47000 in the usual way

The current share price is 188p

Statement of financial position£sAssets£s

Non-current assets
Intangible assets	43600
Tangible assets	348000
Total
Current assets
Inventories	11510
Trade receivables	104000
Cash	829190
Total
Total Assets

Equity

Share capital (100p shares)	500000
Other reserves	25000
Retained earnings	769000
Total equity

LiabilitiesCurrent liabilities;

Non-current liabilities;
7.8% unsecured loan stock 2016	20000
3.7% mortgage debenture 2017	15000
Total non-current liabilities
Trade and other payables	7300
Total liabilities

Interest payable£s

3.7% mortgage debenture 2017	555
7.8% unsecured loan stock 2016	1560
Total interest

What is the Price earnings ratio?

Answer: 

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Coursework Question 51

What is the dividend yield?

Answer: % 

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Coursework Question 52

What is the net asset value per share?

Answer: £ 

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Coursework Question 53

What is the ROCE?

Answer: % 

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Coursework Question 54

What is the current ratio?

Answer: 

 

Coursework Question 55

What is the liquidity ratio

Answer: 

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Coursework Question 56

What is the creditors turnover

Answer: days 

 

Coursework Question 57

What is the debtors turnover

Answer: days 

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Coursework Question 58

What is the asset cover for the debt

Answer: 

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Coursework Question 59

What is the stock turnover

Answer: days 

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Coursework Question 60

What is the profit margin

Answer: %