User Account

All Pages

Draft memorandum for Lane Miller that explains requirements

Assignment Help Accounting Basics
Reference no: EM132637939

Question - 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 - 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: EM132637939

Questions Cloud

What will the operating profit be : Assume that the projected number of units sold for the month is 5,500. What will the operating profit be
How much is the total assets as of December : The Script Co. had the following information for 20x1: Accounts receivable turnover 10:1. How much is the total assets as of December 31, 20x1
How your health has been impacted by your access : Healthy People 2020 organizes the determinants of health around five key domains: economic stability, education, health and healthcare, neighborhood.
Identify some overhead costs in the manufacturing operations : Identify some overhead costs in the manufacturing operations. What makes these overhead costs and what cost driver should be used to apply
Draft memorandum for Lane Miller that explains requirements : Draft a memorandum for Lane Miller that explains the accounting requirements for the proposed investment
Are any other light beers that might include in : Are there any "Texas" beers that you might include if you did this in Arlington? What are their brand images? Are there any other "light" beers that you might
How alan can resolve the issue to produce happiness : How Alan can resolve the issue to produce the greatest balance of happiness over unhappiness for everyone affected by his decision?
What is Rio cost of goods manufactured for February : Rio applies manufacturing overhead to its products at a rate of 200% of direct labor cost. What is Rio's cost of goods manufactured for February
How important has cash generation for current company : How important has cash generation been for your current company or a prior employer? How is cash generation different from the concept of profit and loss

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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