The balance sheets of United plc, Blue Ltd and Green Ltd at 30 September 2002, the accounting date for all three companies, are given below:
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
Fixed assets: |
||||||
|
Intangible assets (Note 1) |
||||||
|
Tangible assets |
25000 |
22000 |
1200 |
|||
|
Investments (Note 2) |
23900 |
– |
20000 |
|||
|
48900 |
22000 |
22000 |
||||
|
Current assets: |
||||||
|
Stocks |
8000 |
7000 |
7500 |
|||
|
Debtors (Note 3) |
8500 |
7200 |
7400 |
|||
|
Cash |
900 |
600 |
500 |
|||
|
17400 |
14800 |
15400 |
||||
|
Creditors: amounts falling |
||||||
|
due within one year(Note 3) |
(9200) |
(7900) |
(7300) |
|||
|
Net current assets |
8200 |
6900 |
8100 |
|||
|
Total assets less current |
57100 |
28900 |
29300 |
|||
|
liabilities |
||||||
|
Creditors: amounts falling |
||||||
|
due after more than one year |
(12000) |
(10000) |
(9000) |
|||
|
45100 |
18900 |
20300 |
||||
|
Capital and reserves: |
||||||
|
Called up share capital |
20000 |
10000 |
10000 |
|||
|
(£1 ordinary shares) |
||||||
|
Share premium account |
5000 |
4000 |
3000 |
|||
|
Profit and loss account |
20100 |
4900 |
7300 |
|||
|
45100 |
18900 |
20300 |
Notes to the financial statements
Note 1
The intangible fixed asset of Green Ltd represents capitalised development expenditure. United plc writes off such expenditure as it is incurred. At the date of its acquisition by United plc, the balance sheet of Green Ltd contained capitalised development expenditure of £400 000.
Note 2
Details of the investments by United plc are as follows:
|
Company |
Number of |
Date of |
Price paid |
Reserves balance of |
|
ordinary shares |
acquisition |
acquired company at |
||
|
acquired |
date of acquisition |
|||
|
Blue Ltd |
8 million |
1 October 1994 |
£14.8 million |
£2 million |
|
Green Ltd |
7.5 million |
1 October 1995 |
£13.5 million |
£3 million |
The following additional information is relevant:
- All shares carry one vote at annual general meetings.
- No fair value adjustments were necessary as a result of the acquisition of either company.
- Goodwill on acquisition is written off over 10 years.
- On 30 September 2002, United plc disposed of 2 million shares in Blue Ltd for proceeds of £4.4 million. Upon receiving the cash, United plc credited the proceeds of disposal to its investments account. Apart from this, United plc has made no other entries in respect of the disposal. Taxation of £200000 is expected to be payable on the disposal.
- Neither Blue Ltd or Green Ltd has issued shares since the dates of acquisition by United plc.
Note 3
United plc provides goods and services to Blue Ltd and Green Ltd and the debtors of United plc at 30 September 2002 contained the following balances:
- Receivable from Blue Ltd £500000.
- Receivable from Green Ltd £400000.
The above amounts agreed to the amounts recognised in the trade creditors of Blue Ltd and Green Ltd. There were no goods in the stock of Blue Ltd or Green Ltd at 30 September 2002 that had been purchased from United plc.
Required
Prepare the consolidated balance sheet of United plc at 30 September 2002. Marks will be given for workings and explanations that support your figures.