SOLUTION: The statement of financial position of A LTD on 31 December 2020 was as follows;
Statement of Financial Position as at 31/12/2020
Asset
Algebra ->
Finance
-> SOLUTION: The statement of financial position of A LTD on 31 December 2020 was as follows;
Statement of Financial Position as at 31/12/2020
Asset
Log On
Question 1175357: The statement of financial position of A LTD on 31 December 2020 was as follows;
Statement of Financial Position as at 31/12/2020
Asset $
Non current Asset 2 000 000
Goodwill 100 000
Debenture discount 50 000
Net current asset 400 000
2 550 000
Equity/ Liability
Ordinary share capital 1 500 000
General reserve 400 000
Retained profits 500 000
2 400 000
20% Preference shares 100 000
30% Debentures 30 000 130 000
Current liabilities
Accounts payable 20 000
2 550 000
The net profit of A LTD after tax for the next 4 years was expected to be as follows;
Year ended
31/12/21 200 000
31/12/22 300 000
31/12/23 350 000
31/12/24 380 000
31/12/25 400 000
A fair rate of return on the business as a whole is estimated to be 20%.
Required
Calculate the value of 1 ordinary share on A LTD as at 31 December 2020 using super profits method.
