ACC705 Corporate Accounting Assignment

ACC705 Corporate Accounting Assignment

ACC705 Corporate Accounting Assignment

This is an individual assignment.

Marks:There are total 30 marks assigned for this task.

You are required to complete two questions that are mentioned below:

Question 1 (20 marks)

Consolidation of a wholly owned subsidiary, pre-acquisition equity and BCVR entries for assets and liabilities

Lisa Ltd acquired all the issued shares of Kam Ltd on 1 January 2016 for $88 000. At this date the equity of Kam Ltd consisted of:

 

                                    Share capital                            $          100 000

                                    General reserve                                                50 000

                                    Retained earnings                                10 000

All the identifiable assets and liabilities of Kam Ltd were recorded at amounts equal to their fair values except for:

                                                                Carrying amount                  Fair value

Fixtures & Fittings (cost $70 000)        $50 000                                               $60 000

Inventory                                             10 000                                     20 000

Of the inventory on hand at 1 January 2016, 90% was sold by 30 June 2016. The remainder was all sold on 30 June 2017. The Fixtures & Fittings was considered to have a further 2-year life with benefits to be received equally in each of those years.  There were no records in the books for a provision of legal claim worth 15,000 and patents of 90,000. These were reflected at fair value. The tax rate is 30%.

Required

Prepare the consolidated worksheet entries for the consolidated financial statements prepared by Lisa Ltd at 30 June 2016.

Show acquisition analysis calculation, BCVR entries and Pre-acquisition entries for 30.6.16

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Question 2 (10 marks)

The following information has been extracted from the accounting records of Samoa Ltd for the year ended 30 June 2016:

 

 

Debit

Credit

 

 

Sales

Dividends paid

Cost of sales

Finance costs

Distribution costs

Transfer from the general reserve

Marketing costs

Administrative costs

Proceeds from sale of plant and machinery

Carrying amount of plant and machinery

 

$  10 000

3 500 000

100 000

200 000

 

66 000

99 000

 

40 000

$5 000 000

 

 

 

 

33 000

 

 

80 000

 

 

The tax rate is 30%.

Required

You need to prepare a profit or loss statement and other inclusive income for Samoa Ltd, for the year ended 30 June 2017, and notes to the accounts in compliance with AASB 101. Please categorize expenses by function.

Note: The company name is mentioned only for reference purpose. You’ll find the actual scenario in your assignments.

Problems that students face in the completion of this assignment

Students face several problems in completing ACC705 Corporate Accounting Assignment such as:

1. Deficiency of time
2. Preparing the statement of profit and loss
3. Calculating various costs

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