User Account

All Pages

How do explain the accounting requirements for the proposed

Assignment Help Managerial Accounting
Reference no: EM132638578

Lane Miller, who was recently appointed Chief Financial Officer of Midas Ltd, is considering utilising some excess funds to invest in the shares of Queen Ltd. Between 2015 and 2019, Queen Ltd has been performing very well and is expected to increase profits over the next three to four years. Queen Ltd has regularly paid dividends and is expected to pay dividends for the foreseeable future. There have been, in recent years some sales of inventory and non-current assets between Midas Ltd and Queen Ltd. Midas Ltd is also considering a proposal to lend some cash to Queen Ltd. The funds available would allow Midas Ltd to purchase 40% of the issued shares of Queen Ltd. Each share carries one vote at the company's general meeting. Queen Ltd has 8 directors. Midas Ltd believes that several assets in Queen Ltd's balance sheet are carried well below their fair value. Lane Miller has said that he thinks that such an investment would be measured at fair value with gains or losses on changes in fair value being taken through other comprehensive income. However, he has admitted that he is unfamiliar with these types of investments which is why he has requested some information about the applicable accounting requirements from you.

Required

Question 1: Draft a memorandum for Lane Miller that explains the accounting requirements for the proposed investment. In particular you should explain how the profit of Queen Ltd would be recognised in Midas Ltd's financial statements.

Reference no: EM132638578

Questions Cloud

Compute the net income for the year : Problem - Presented below is certain information pertaining to Crane Company. Compute the net income for the year
Research experience from the individual assignment : Research experience from the individual assignment (activity based costing system) What was enjoyable, what was difficult, and any challenges you experienced?
What is define fixed and variable product costs : What is define fixed and variable product costs? How are these costs used in determining the contribution margin of different products manufactured and sold?
Prepare journal entries to record the transactions : The sinking fund cash is used to acquire AB Company 12% bonds of P500,000 face value, Prepare journal entries to record the transactions
How do explain the accounting requirements for the proposed : How do explain the accounting requirements for the proposed investment. In particular you should explain how the profit of Queen Ltd would be recognised
Record the transactions in the t accounts : Record the transactions in the T accounts and provide the December 31 balance where appropriate. If required, round to one decimal place
What is the treatment of fixed manufacturing costs : What is the treatment difference of fixed manufacturing costs between absorption and variable costing? Give an example and provide the specific example.
Prepare the journal entry to record interest on June : On January 1, 2021, for $17.4 million, Cenotaph Company purchased 8% bonds, Prepare the journal entry to record interest on June
Draw up a cash budget for amben ltd showing : Draw up a cash budget for Amben Ltd showing the balance at the end of each month from the information for the six months ended 31 December

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd