(d) Player trading
Another proposal is for the club to sell its two valuable players, Aldo and Steel. It is thought that it will receive a
total of $16 million for both players. The players are to be offered for sale at the end of the current football season
on 1 May 2007. (5 marks)
Required:
Discuss how the above proposals would be dealt with in the financial statements of Seejoy for the year ending
31 December 2007, setting out their accounting treatment and appropriateness in helping the football club’s
cash flow problems.
(Candidates do not need knowledge of the football finance sector to answer this question.)