问答题What were the consequences of the Norman Conquest?
问答题
What were the consequences of the Norman Conquest?
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(b) One of the hotels owned by Norman is a hotel complex which includes a theme park, a casino and a golf course,as well as a hotel. The theme park, casino, and hotel were sold in the year ended 31 May 2008 to Conquest, apublic limited company, for $200 million but the sale agreement stated that Norman would continue to operateand manage the three businesses for their remaining useful life of 15 years. The residual interest in the businessreverts back to Norman after the 15 year period. Norman would receive 75% of the net profit of the businessesas operator fees and Conquest would receive the remaining 25%. Norman has guaranteed to Conquest that thenet minimum profit paid to Conquest would not be less than $15 million. (4 marks)Norman has recently started issuing vouchers to customers when they stay in its hotels. The vouchers entitle thecustomers to a $30 discount on a subsequent room booking within three months of their stay. Historicalexperience has shown that only one in five vouchers are redeemed by the customer. At the company’s year endof 31 May 2008, it is estimated that there are vouchers worth $20 million which are eligible for discount. Theincome from room sales for the year is $300 million and Norman is unsure how to report the income from roomsales in the financial statements. (4 marks)Norman has obtained a significant amount of grant income for the development of hotels in Europe. The grantshave been received from government bodies and relate to the size of the hotel which has been built by the grantassistance. The intention of the grant income was to create jobs in areas where there was significantunemployment. The grants received of $70 million will have to be repaid if the cost of building the hotels is lessthan $500 million. (4 marks)Appropriateness and quality of discussion (2 marks)Required:Discuss how the above income would be treated in the financial statements of Norman for the year ended31 May 2008.
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