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Page 1 Kaplan Business School Assessment 3 Outline
Assessment 3 Information
Subject Code: ACCM4300
Subject Name: Financial Reporting
Assessment Title: Assessment 3
Assessment Type: Statement of Advice - Individual Assignment
Word Count 2,000 words (+/- 10%)
Weighting: 40 %
Total Marks: 40
Submission: Via Turnitin-written report
Due Date: Tuesday of Week 13 at 19:55 (AEST)
Your Task
You are required to prepare a statement of advice to answer all of the following questions listed
on pages 2-3 of this document.
Assessment Description
Assume that you are a team of graduate accountants working for BluePrint Pty Ltd, a public
accounting firm situated at 297 York Street, Sydney, NSW 2000. The Manager of your firm, Mr.
Aaron Mazars has asked you to prepare a statement of advice in response to various emails
eceived from clients raising several accounting issues. Please see the issues on the
next page.
The maximum length for the statement of advice is 2,000 words. You should address all the
technical issues and discussion in your advice, followed by a Reference List.
Part A: Technical component 30% - This mark covers the technical content of your
advice and the explanation of each of the issues, the calculations, journal entries (where
applicable) and the sources used.
Part B: Communication Skills (Writing Skills) 10% - This mark covers the generic skills
of writing; clear meaning, structure and organisation, appropriate tone and grammar,
spelling, and punctuation, etc., throughout the whole assignment.
Page 2 Kaplan Business School Assessment 3 Outline
Case Study (Issues identified from three clients)
You are an assistant accountant for BluePrint Pty Ltd, Public Accounting firm. Your
manager Aaron asked you to draft a statement of advice for the following three clients
egarding their concerns listed below.
Client 1 (Max Hills Ltd) Re. Recognition of assets and liabilities in business
combination
Max Hills Ltd recently purchased 100% of issued shares in Mini Ltd. The directors of Max
Hills Ltd discovered the following items were not recognised in Mini Ltd
of acquisition.
Intangible assets
a) a household
and name which the market has valued at $10 million;
) a customer list consisting of information about customers, such as their name, personal
preferences, order or product backlog and contact information, which is estimated to
have a fair value of $5 million; and
c) a good customer relationship (customer contracts and related customer relationship)
which is highly valued by Subsidiary Ltd, but which is estimated to have a fair value of
only $1 million once the ownership and management of Subsidiary Ltd is changed
through the acquisition.
Contingent liabilities
a) a contingent liability involving a claim for infringement of copyright, which the lawyers
are of the opinion that there is a 60% chance that Mini Ltd will have to pay nothing, a
20% chance that it has to pay $100,000 and another 20% chance that it has to pay
$500,000; and
) a contingent liability involving a possible payment of $1 million compensation to the
CEO of Mini Ltd in the event that the CEO is dismissed within 3 years for not meeting
the profit targets.
Provide advice to the managing director of Max Hills Ltd, with relevant references to the
Australian Accounting standards in your answer.
Client 2 (MCL Ltd) Re. Intra group entries
MCL Ltd is a wholesaler of chemicals and a distributor. On 1 July 2021, MCL acquired all
the equity in Bulldog Ltd, a company incorporated in Israel for AUD $1,550,000. At that
date, the equity of Bulldog Ltd consisted of share capital ILS 4,800,000 and retained
earnings ILS 800,000. (Note: ILS = Israeli New Shekel, Israeli cu
ency)
At the date of acquisition, all of the assets and liabilities were valued at fair value except for
land, which was undervalued by ILS 600,000 (ca
ying amount was ILS 2,800,000)
The exchange rates for the reporting period ending 30 June 2022 are shown below.
1 July 2021 AUD $1 = ILS 4
Average rate for the year AUD $1 = ILS 4.80
30 June 2022 AUD $1 = ILS 5
Page 3 Kaplan Business School Assessment 3 Outline
is the Australian dollar. The tax rate in Australia is 30 per cent, while the tax rate in Israel is
40 per cent.
The directors of MCL need your help to prepare consolidation worksheet entries as at 1
July 2021 and 30 June 2022.
Provide advice to the managing director of MCL Ltd, with relevant references to the
Australian Accounting standards in your answer.
Client 3 (BKL Group Ltd) Re. Presentation/Disclosure of Non-controlling interest
BKL Ltd is preparing its consolidated financial statements for the year ended 30 June 2021.
The directors are wondering how non-controlling interest will be disclosed in their
consolidated financial reports.
On 1 July 2020, BKL Ltd purchased 70% of the shares of Subsidiary Ltd for $160,000. At
the acquisition date, Subsidiary Ltd had issued capital of $100,000 and retained earnings
of $100,000. Note: Goodwill was calculated as $20,000 using a full goodwill method.
During 2020/21 financial year,
BKL Ltd and Subsidiary Ltd recorded profits of $100,000 and $50,000 respectively.
BKL Ltd sold inventory with a cost of $5,000 to Subsidiary for $$9,000. 80% of this
inventory was still on hand of Subsidiary on 30 June 2021.
Subsidiary Ltd adapted a fair valuation method and increased its Land value by
$15,000.
On 30 June 2021, both BKL Ltd and Subsidiary Ltd declared dividend of $10,000.
The directors at BKL asked for your help with completing the consolidated financial
statements. How should non-controlling interest be recorded on financial statements? Help
the director to identify all affected financial statements and sections of the financial
statements with non-controlling interest amounts.
Provide advice to the director, with relevant references to the Australian Accounting
standards in your answer.
Page 4 Kaplan Business School Assessment 3 Outline
Assessment Instructions
The assignment will need to be submitted electronically through the student
portal use the link under
Referencing
Any sources that you use need to be acknowledged in order to avoid plagiarism.
Information on referencing can be found in the Guidelines for Referencing and
Presentation at the Kaplan website using the following address:
(https:
elearning.kbs.edu.au/mod/page/view.php?id=128881).
In-Text Referencing and the Reference List
Sources of information must be cited both in the body of the text (in-text referencing) and
the end of the assignment (reference list). Failure to do so will result in penalties.
Remember that when referencing an Annual Report, it is a corporate document that does
not have a particular author but it will still require referencing any time you use information
from it. Any other documents or books or other references you use will also require
eferencing.
Please note
Any work which has been copied or shared between students will result in a Fail grade for
all students concerned. Therefore, please make sure that the answer to this assignment is
your work and not copied or bought from any source. In completing this assignment make
sure you follow the guidelines for assignments especially those relating to the
presentation of written work, late assignment policy and academic integrity.
Page 5 Kaplan Business School Assessment 3 Outline
Important Study Information
Academic Integrity Policy
KBS values academic integrity. All students must understand the meaning and consequences
of cheating, plagiarism and other academic offences under the Academic Integrity and Conduct
Policy.
What is academic integrity and misconduct?
What are the penalties for academic
misconduct? What are the late penalties?
How can I appeal my grade?
Click here for answers to these questions:
http:
www.kbs.edu.au/cu
ent-students/student-
policies/.
Word Limits for Written Assessments
Submissions that exceed the word limit by more than 10% will cease to be marked from the point
at which that limit is exceeded.
Study Assistance
Students may seek study assistance from their local Academic Learning Advisor or refer to the
esources on the MyKBS Academic Success Centre page. Click here for this information.
http:
www.kbs.edu.au/cu
ent-students/student-policies
http:
www.kbs.edu.au/cu
ent-students/student-policies
https:
elearning.kbs.edu.au/course/view.php?id=1481
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