Assessment Answers of Problem Based Assessment: ACG509

Assessment Answers of Problem Based Assessment: ACG509

Running head: ACG509 GLOBAL PERSPECTIVES OF ACCOUNTING
ACG509 Global Perspectives of Accounting
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Name of the University:
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Running head: ACG509 GLOBAL PERSPECTIVES OF ACCOUNTING
ACG509 Global Perspectives of Accounting
Name of the Student:
Name of the University:
Author ’sNote:
1 ACG509 GLOBAL PERSPECTIVES OF ACCOUNTING
Table of Contents
Answer to Question 1:…………………………………………………………………………………………………………….. 2
Requirement 1) …………………………………………………………………………………………………………………… 2
Requirement 2) …………………………………………………………………………………………………………………… 2
Answer to Question 2:…………………………………………………………………………………………………………….. 3
Requirement 1) …………………………………………………………………………………………………………………… 3
Requirement 2) …………………………………………………………………………………………………………………… 3
Requirement 3) …………………………………………………………………………………………………………………… 5
Requirement 4) …………………………………………………………………………………………………………………… 6
Answer to Question 3:…………………………………………………………………………………………………………….. 7
Requirement 1) …………………………………………………………………………………………………………………… 7
Requirement 2) …………………………………………………………………………………………………………………… 8
2 ACG509 GLOBAL PERSPECTIVES OF ACCOUNTING
Answer to Question 1:
Requirement 1)
Amount Amount
Purchase Consideration: (in $) (in $)
Cash payments 188,000
Land 400,000
Motor vehicle 45,400
Share capital 2,500,000 3,133,400
Less: NFVINA
Share capital 102,000
Retained earnings 1,161,750
Cash -18,750
Land 450,000
Buildings 610,000
Machinery 250,000
Motor vehicle -94,000
Inventories 40,000
Brand name 500,000
Accounts payable 178,000 3,179,000
GOODWILL/(GAIN ON BARGAIN PURCHASE) -45,600
Requirement 2)
DATE ACCOUNTS DEBIT CREDIT
(in $) (in $)
2021-06-30 DR. Land 450,000
DR. Buildings 400,000
DR. Inventories 40,000
DR. Brand Name 500,000
DR. Accum. Dep. -Buildings 210,000
DR. Accum. Dep. -Machinery 850,000
DR. Accum. Dep. -Vehicles 18,000
DR. Accounts Payable 178,000
CR. Cash 18,750
CR. Machinery 600,000
CR. Vehicles 112,000
CR. BCVR 1,915,250
DR. Share Capital 102,000
DR. Retained Earnings 1,161,750
DR. BCVR 1,915,250
CR. Shares in SPSH 3,133,400
CR. Retained Earnings -Gain on Bargain Purchase 45,600
3 ACG509 GLOBAL PERSPECTIVES OF ACCOUNTING
DR. Land 150,000
DR. Accum. Dep. -Vehicles 15,000
CR. Vehicles 8,600
CR. Asset Revaluation Surplus 6,400
Answer to Question 2:
Requirement 1)
Amount Amount
(in $) (in $)
Purchase Consideration 137,200
Less: NFVINA
Share capital 60,000
General reserve 30,000
Retained earnings 21,000
Other reserves 6,000
Inventory 6,000
Tax adjustment -1,800
Equipment 8,000
Tax adjustment -2,400
Machinery 1,000
Tax adjustment -300
Land 6,000
Tax adjustment -1,800 131,700
GOODWILL/(GAIN ON BARGAIN PURCHASE) 5,500
Requirement 2)
DATE ACCOUNTS DEBIT CREDIT
(in $) (in $)
1 DR. Accum. Dep. -Equipment 6,000
DR. Equipment 2,000
DR. Goodwill 5,500
CR. Deferred tax liability 2,400
CR. BCVR 11,100
2 DR. Depreciation Expense 1,100
DR. Gain/(losses) on non-current assets sold 700
DR. Deferred tax liability 600
DR. Retained Earnings (1/7/20) 840
CR. Income Tax Expense 540
4 ACG509 GLOBAL PERSPECTIVES OF ACCOUNTING
CR. Accum. Dep. -Equipment 2,000
CR. Transfer from BCVR 700
3 DR. Share Capital 60,000
DR. General Reserve 30,000
DR. Retained Earnings (1/7/20) 29,400
DR. Other Reserves 6,000
DR. Business combination valuation reserve 11,800
CR. Shares in Paisley Ltd. 137,200
4 DR. Share Capital 6,000
CR. Other Reserves 6,000
5 DR. Transfer from BCVR 700
CR. BCVR 700
6 DR. Impairment Loss 2,750
CR. Accum. Impairment Loss -Goodwill 2,750
7 DR. Retained Earnings (1/7/20) 140
DR. Income Tax Expense 60
CR. Cost of Sales 200
8 DR. Sales 15,000
CR. Cost of Sales 14,000
CR. Inventory 1,000
9 DR. Deferred Tax Asset 300
CR. Income Tax Expense 300
10 DR. Retained Earnings (1/7/20) 700
DR. Deferred Tax Asset 300
CR. Equipment 1,000
11 DR. Accum. Dep. -Equipment 150
CR. Depreciation Expense 100
CR. Retained Earnings (1/7/20) 50
12 DR. Income Tax Expense 30
DR. Retained Earnings (1/7/20) 15
CR. Deferred Tax Asset 45
13 DR. Retained Earnings (1/7/20) 1,400
DR. Deferred Tax Asset 600
CR. Machinery 2,000
5 ACG509 GLOBAL PERSPECTIVES OF ACCOUNTING
14 DR. Accum. Dep. -Machinery 300
CR. Depreciation Expense 200
CR. Retained Earnings (1/7/20) 100
15 DR. Income Tax Expense 60
DR. Retained Earnings (1/7/20) 30
CR. Deferred Tax Asset 90
16 DR. Advance from 70s Clothing Ltd. 10,000
CR. Advance to Paisley Ltd. 10,000
17 DR. Dividend Revenue 2,000
CR. Dividend Paid 2,000
18 DR. Dividend payable 3,000
CR. Dividend Receivable 3,000
19 DR. Dividend Revenue 3,000
CR. Dividend Declared 3,000
Requirement 3)
70s ADJUSTMENTS
CLOTHING PAISLEY DEBIT CREDIT GROUP
Sales revenue 85,000 65,000 8 15,000 135,000
Other revenue 19,000 21,000 17,19 5,000 35,000
104,000 86,000 170,000
Cost of sales 65,000 53,500 14,200 7,8 104,300
Other expenses 22,000 27,000 2,6 3,850 300 11,14 52,550
Trading profit 17,000 5,500 13,150
Gain/(losses) on non-current assets sold 4,000 1,000 2 700 4,300
Profit before tax 21,000 6,500 17,450
Income tax expense 7,200 2,000 7,12,15 150 840 2,7,9 8,510
Profit after tax 13,800 4,500 8,940
Retained earnings (1/7/20) 16,000 35,500 2,3,7,10,12,13,15 32,525 150 11,14 19,125
Transfer from BCVR 5 700 700 2 0
Dividend paid 4,000 2,000 2,000 17 4,000
Dividend declared 10,000 3,000 3,000 19 10,000
Retained earnings (30/6/21) 15,800 35,000 14,065
Share capital 170,000 66,000 3,4 66,000 170,000
General reserve 41,000 30,000 3 30,000 41,000
Other reserves 3 6,000 6,000 4 0
BCVR 3 11,800 11,800 1,5 0
Total equity 226,800 131,000 225,065
6 ACG509 GLOBAL PERSPECTIVES OF ACCOUNTING
Debentures 120,000 120,000
Deferred tax liability 2 600 2,400 1 1,800
Dividend payable 10,000 3,000 18 3,000 10,000
Current tax liability 8,000 2,500 10,500
Other payables 34,800 10,100 44,900
Advance from 70s Clothing Ltd 10,000 16 10,000 0
Total liabilities & equity 399,600 156,600 412,265
Shares in Paisley Ltd. 137,200 137,200 3 0
Land 24,480 24,480
Machinery 28,000 22,000 2,000 13 48,000
Accum. Depreciation -machinery -4,000 -2,000 14 300 -5,700
Equipment 34,000 37,300 1 2,000 1,000 10 72,300
Accum. Depreciation -equipment -2,000 -6,000 1,11 6,150 2,000 2 -3,850
Inventory 171,580 70,320 1,000 8 240,900
Deferred tax asset 16,200 7,400 9,10,13 1,200 135 12,15 24,665
Advance to Paisley Ltd. 10,000 10,000 16 0
Other assets 8,620 3,100 3,000 18 8,720
Goodwill 1 5,500 5,500
Accum. Imapirment loss 2,750 6 -2,750
Total assets 399,600 156,600 200,475 200,475 412,265
Requirement 4)
70s CLOTHING LTD.
CONSOLIDATED INCOME STATEMENT
for the period ending 30 June 2021
Amount
(in $)
Sales revenue 135,000
Cost of Sales -104,300
Gross Profit 30,700
Other Revenues 35,000
Other Expenses -52,550
Net Operating Profit 13,150
Gain/(losses) on non-current assets sold 4,300
Net Profit before Tax 17,450
Tax expense -8,510
NET PROFIT after TAX 8,940
7 ACG509 GLOBAL PERSPECTIVES OF ACCOUNTING
70s CLOSTHING LTD
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the period ending 30 June 2021
SHARE RETAINED GENERAL TOTAL
CAPITAL EARNINGS RESERVE EQUITY
(in $) (in $) (in $) (in $)
Opening Balance 170,000 19,125 41,000 230,125
Net Profit after Tax 8,940 8,940
Dividend Paid -4,000 -4,000
Dividend Declared -10,000 -10,000
Closing Balance 170,000 14,065 41,000 225,065
Answer to Question 3:
Requirement 1)
Amount Amount
(in $) (in $)
Purchase Consideration 305,600
Less: NFVINA
Share capital 300,000
Retained earnings 20,000
Other reserves 30,000
Other components of equity 10,000
Inventory 10,000
Tax adjustment -3,000
Machinery 5,000
Tax adjustment -1,500
Contingent liability -7,000
Tax adjustment 2,100
Equipment design 12,000
Tax adjustment -3,600
Goodwill -22,000
Accum. Impairment Loss -Goodwill 12,000 364,000
Add: Non-Controlling Interest 75,000
GOODWILL/(GAIN ON BARGAIN PURCHASE) 16,600
Amount
(in $)
Fair Value of Subsidiary 375,000
Less: NFVINA 364,000
Goodwill of Subsidiary 11,000
Less: Recorded Goodwill of Subsidiary 10,000
UNRECORDED GOODWILL 1,000
8 ACG509 GLOBAL PERSPECTIVES OF ACCOUNTING
Amount
(in $)
Goodwill of Parent 16,600
Less: Goodwill of Subsidiary 11,000
CONTROL PREMIUM 5,600
Requirement 2)
DATE ACCOUNTS DEBIT CREDIT
(in $) (in $)
DR. Depreciation Expense 750
DR. Gain/(losses) on non-current assets sold 2,250
DR. Retained Earnings (1/7/20) 1,400
CR. Income Tax Expense 900
CR. Transfer from BCVR 3,500
DR. Equipment Design 12,000
DR. Goodwill 1,000
CR. Deferred Tax Liability 3,600
CR. BCVR 9,400
DR. Amortisation Expense 1,200
DR. Retained Earnings (1/7/20) 1,680
DR. Deferred Tax Liability 1,080
CR. Accum. Amortisation -Equipment 3,600
CR. Income Tax Expense 360
DR. Accum. Impairment Loss -Goodwill 12,000
CR. Goodwill 12,000
DR. Share Capital 240,000
DR. Retained Earnings (1/7/20) 15,280
DR. Other Reserves (1/7/20) 26,400
DR. Other Components of Equity (1/7/20) 8,000
DR. BCVR 10,320
DR. Goodwill 5,600
CR. Shares in Sandan Ltd. 305,600
DR. Share Capital 60,000
DR. Retained Earnings (1/7/20) 2,584
DR. Other Reserves (1/7/20) 6,600
DR. Other Components of Equity (1/7/20) 14,400
DR. BCVR 2,580
9 ACG509 GLOBAL PERSPECTIVES OF ACCOUNTING
CR. Non-Controlling Interest 86,164
DR. Share Capital 30,000
CR. Other Reserves (1/7/20) 30,000
DR. Transfer from Other Reserves 2,000
CR. Transfer to Retained Earnings 2,000
DR. Transfer from BCVR 3,500
CR. BCVR 3,500
DR. NCI Share of Profit 9,412
DR. Movements in Fair Value 1,600
CR. Non-Controlling Interest 11,012
DR. Dividend Revenue 4,800
DR. Non-Controlling Interest 1,200
CR. Dividend Paid 6,000
DR. Dividend Revenue 3,200
DR. Non-Controlling Interest 800
CR. Dividend Declared 4,000
DR. Dividend Payable 3,200
CR. Dividend Receivable 4,000
DR. Retained Earnings (1/7/20) 2,240
DR. Non-Controlling Interest 560
DR. Deferred Tax Asset 1,200
CR. Plant 4,000
DR. Accum. Dep. -Plant 800
DR. Income Tax Expense 120
DR. NCI Share of Profit 56
CR. Retained Earnings (1/7/20) 224
CR. Deferred Tax Assets 240
CR. Depreciation Expense 400
CR. Non-Controlling Interest 112
DR. Retained Earnings (1/7/20) 280
DR. NCI Share of Profit 70
DR. Income Tax Expense 150
CR. Cost of Sales 500
DR. Sales 12,000
CR. Cost of Sales 11,500
10 ACG509 GLOBAL PERSPECTIVES OF ACCOUNTING
CR. Inventory 500
DR. Deferred Tax Assets 150
CR. Income Tax Expense 150

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