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Question 2b

Your manager is due to attend a meeting with the finance director of Opus Ltd. A schedule of information obtained from the client files and an email from your manager in connection with the Opus Ltd group are set out below.

Schedule of information

Opus Ltd — acquisition of the holdings in other companies
- Opus Ltd acquired Akia Ltd and the shareholding in Ribe Ltd (together with its subsidiary Lido Ltd) on 1 January 1999.
- Venere Ltd has an issued share capital of 1,000,000 ordinary shares. Opus Ltd acquired 170,000 ordinary shares in Venere Ltd on 1 July 2004 for £65,000. It sold 120,000 of these shares on 1 October 2013 for £150,000. The indexation factor from July 2004 to October 2013 is 0216.

Email from your manager 
Please carry out the following work in preparation for the Opus Ltd meeting.

(b) Sale of the shares in Venere Ltd

Opus Ltd has received an offer of £80,000 for its remaining 50,000 ordinary shares in Venere Ltd. If the sale were to go ahead, it would take place on 30 June 2014. However, the management of Opus Ltd are of the opinion that the results of Venere Ltd for the year ending 31 March 2015 will be such that the shares could be worth as much as £100,000 if the sale were to be delayed until 30 April 2015.

Set out the matters which the management of Opus Ltd should consider in order to decide on which of the two dates it would be more financially advantageous to sell the shares in Venere Ltd. When calculating the indexation allowance, use an approximate indexation factor of 0400 for the period from 1 July 2004 until the date of sale.

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ACCA ATX P6 UK Past papers exam Q2b

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