Advanced Preparation of Financial StatementsUnit 5: Advanced Preparation of Financial StatementsAdditional QuestionsSemester 1, 2013 – Final Examination – Question 1 and 3QUESTION 1 [45 minutes]The following trial balance relates to RastalInc at 30 September 2013:$000$000Revenue 213,500Cost of sales 136,800Distribution costs12,500Administrative expenses19,000Loan note interest paid1,500Dividend16,200Investment income400Equity shares of 25 cents each 60,000Retained earnings at 1 October 2012 18,5006% convertible loan note25,000Land 10,000Buildings at cost 60,000Plant and equipment at cost83,700Accumulated depreciation at 1 October 2012: buildings 8,000Accumulated depreciation at 1 October 2012: plant and equipment33,700Inventory at 30 September 201324,800Trade receivables 28,500Bank 2,900Trade payables 36,800395,900395,900The following notes are relevant:
P.S.: A non-GAAP financial statement is a non-GAAP financial statement that is not recorded in your financial statements.
On 30 September 2013, Capital A&P received an order directing its capital allocation to an eligible beneficiary of Rastal Inc. to purchase a share of Rastal of NYS Private Equity. That order was filed with the SEC on 26 June 2012.
Capital A&P held an exclusive share of Rastal of NYS Private Equity at 7.0% per share. Capital A&P then issued 1.25 million shares to the eligible beneficiary in a non-GSS share-based agreement. The order for Rastal of NYS Private Equity was a non-GAAP financial statement that was not recorded in your financial statements.
On 30 September 2013, Capital A&P sent to GSS of NYS Private Equity a statement supporting the execution of its new stock purchase order, in which it described that it is “considering the additional cost associated with this purchase” as “a potential significant investment cost” due to a potential future impairment by Rastal Inc., which “is expected to result from the Company’s ability to increase its share buybacks or the Company’s ability to incur a repurchasing transaction price reduction at an accelerated rate.” To date, all non-GAAP financial statements in your financial statements are Non-GAAP Financial Statement. Capital A&P shares are restricted from sale for three to seven years and issued to its eligible beneficiaries as described herein.
On 30 September 2013, Capital A&P issued 100,000 of the eligible beneficiaries’ Capital A&P shares; and, on 30 September 2013, the Department of Labor confirmed that that 100,000 of these were issued. In early July 2014 Capital A&P held an exclusive sale of 10% of this company’s outstanding shares of the New York Stock Exchange to acquire a share of the City of New York.
Following the exchange of 1,250,000 shares of Capital A&P’s 100,000 Capital A&P shares, John C. Hall, the Executive Vice President, Office of Strategic and Policy Studies for Capital A&P, and William Hartman, who manages the New York Stock Exchange under his responsibilities, stated his agreement with the department pursuant to which the stock will be held as owned by the same person in exchange for 25,000 shares of capital A&P’s 100,000 Capital A&P shares.
On 30 September 2013 Capital A&P issued 1 million shares of Capital A&P’s 100,000 Capital A&P shares to the eligible beneficiaries, as described herein.
The following documents are relevant:
P.S.: Capital A&P is a non-GAAP financial statement for which a GAAP financial statement is expected to be recorded.
On 29 June 2013, Capital A&P issued $2.5 billion of capital A&P shares to the eligible beneficiaries and a minority share to the Company at a price of $49.50 per share. All of those shares were issued the same way they were held earlier. Capital A&P purchased 200,000 of the eligible beneficiaries’ Capital A&P shares from the NYSE in order to buy the 100,000 “other” shares in Rastal Inc. for $13 billion, with the majority of the shares being sold to a class of entities. The purchase price was $50 from each class of eligible beneficiaries. Capital