ACCT 2178 – Contemporary Financial & Integrated Reporting
Assessment Task Two: Session 2, 2020
Weekly Work
Marks: 35% of total assessment
Weekly Work generally
Weekly Work will consist of different tasks relating to a particular module, including:
1) contributing to discussions on the discussion board on questions relating to the module;
2) submitting answers to questions relating to the module in the assignment box on Canvas; o
3) a combination of 1) and 2), that is contributing to discussions on the discussion board on particular question(s) relating to the module and submitting answers to other questions relating to the same module in the assignment box on Canvas.
Contribution of Weekly Work towards your Final Assessment in ACCT 2178
Module
Contribution to your Final Assessment
Module 1
3%
Modules 2, 4, 5, 6, 7, 8, 9, and 10
4% each for 8 different Modules: 4% x 8 modules
32%
Total Contribution of Weekly Work towards your Final assessment in ACCT 2178
35%
Weekly Work for Module 10: submit an answer to the question below on Canvas
Weekly Work relating to Module 10 counts as 4% towards your final assessment in ACCT 2178.
For Module 10, you need to submit an answer to the question below relating to module 10 in the assignment box on Canvas.
Question: Submit to Assignment Box Question [4% of your Final Assessment]
On 30 June 2016, P Ltd purchased 80% of the shares of S Ltd for $4,340,000 cash.
At the date of acquisition, S Ltd’s statement of financial position was as follows:
Statement of Financial Position of S Ltd as at 30 June 2016
Assets Liabilities
Cash 457,000 Accounts Payable 538,000
Accounts Receivable 721,000 Bank Loans 2,412,000
Inventory 794,000 Defe
ed Tax Liabilities 375,000
Land 2,950,000
Buildings 960,000 Equity
(Accumulated Depreciation) (256,000) Share Capital 3,000,000
Plant & Equipment 2,780,000 Revaluation Surplus 875,000
(Accumulated Depreciation) (556,000) Retained Profits 30/6/2016 650,000
Total Assets 7,850,000 Total Equities 7,850,000
Additional Information
a) On 30 June 2016, all the identifiable net assets of S Ltd were considered to be recorded at fair value in S Ltd’s statement of financial position, except land, which had a fair value of $3,450,000. The land has not been revalued in S Ltd’s accounts.
) P Ltd has a policy of valuing Non-Controlling Interest at Fair Value at acquisition date.
c) On 30 June 2018, the recoverable amount of goodwill, relating to the purchase of S Ltd by P Ltd, was assessed to be $415,000. On 30 June 2020, the recoverable amount of goodwill, relating to the purchase of S Ltd by P Ltd, was assessed to be $335,000.
d) On 1 November 2019 S Ltd lent $1,320,000 to P Ltd, at an annual rate of interest of 10%. Interest is payable half-yearly on 30 April, and 31 October each year.
e) During the XXXXXXXXXXfinancial year, S Ltd sold goods to P Ltd for $1,860,000. These goods had originally cost S Ltd $1,220,000. On 30 June 2019, 25% of these goods remained in P Ltd’s closing inventory.
f) On 30 June 2020, P Ltd still owed S Ltd $193,000 for inventory purchases.
g) P Ltd’s opening inventory includes goods purchased from S Ltd for $547,000. These goods had originally cost S Ltd $367,000.
h) On 1 July 2019, P Ltd sold a building to S Ltd for $1,150,000. P Ltd had originally purchased the building for $1,080,000, on 1 July XXXXXXXXXXThe original estimated useful life of the building was 30 years.
i) The company income tax rate is 30%.
Statements of Profit or Loss of P Ltd and S Ltd for the year ended 30 June 2020
P Ltd S Ltd
Sales 14,729,000 8,274,000
Cost of Goods Sold 10,016,000 5,469,000
Gross Profit 4,713,000 2,805,000
Depreciation Expense 535,000 356,000
Bo
owing Costs Expense 609,000 276,000
Administration Expenses 2,475,000 1,431,000
Interest Revenue - 88,000
Dividend Revenue 236,000 -
Gain on Sale of Building 250,000 -
Profit before Income Tax Expense 1,580,000 830,000
Income Tax Expense 474,000 249,000
Profit after Income Tax Expense 1,106,000 581,000
RMIT Classification: Trusted
RMIT Classification: Trusted
ACCT 2178, Weekly Work, Module 10 Study Session 2, 2020
ACCT 2178, Weekly Work, Module 10 Study Session 2, 2020
Statements of Changes in Equity of P Ltd and S Ltd for the year ended 30 June 2020 [Extract]
P Ltd S Ltd
Retained Profits 1/7/19 2,647,000 1,274,000
Profit after Income Tax Expense 1,106,000 581,000
Interim Dividend Paid 264,000 140,000
Final Dividend Declared 289,000 155,000
Retained Profits 30/6/20 3,200,000 1,560,000
Statements of Financial Position of P Ltd and S Ltd as at 30 June 2020
P Ltd S Ltd
Assets
Cash 589,000 398,000
Accounts Receivable 1,504,000 841,000
Dividends Receivable 124,000 -
Interest Receivable - 22,000
Inventory 1,737,000 917,000
Land 5,230,000 2,950,000
Buildings 4,620,000 2,110,000
Accumulated Depreciation (1,848,000) (430,000)
Plant and Equipment 3,810,000 2,780,000
Accumulated Depreciation (2,286,000) (1,668,000)
Loan to P Ltd - 1,320,000
Investment in S Ltd 4,340,000 -
Total Assets 17,820,000 9,240,000
Liabilities
Accounts Payable 1,138,000 588,000
Dividends Payable 289,000 155,000
Bo
owing Costs Payable 156,000 73,000
Bank Loans 5,217,000 2,614,000
Loan from S Ltd 1,320,000 -
Defe
ed Tax Liabilities 495,000 375,000
Equity
Share Capital 4,850,000 3,000,000
Revaluation Surplus 1,155,000 875,000
Retained Profits 30/6/20 3,200,000 1,560,000
Total Equities 17,820,000 9,240,000
Required:
Prepare the Consolidation Worksheet Journal entries for the financial year ended 30 June 2020, including the consolidation journal entries recognising the non-controlling interest. Show all workings necessary to derive your answer.
Due Date:
Friday, 23 October 2020
ACCT 2178, Weekly Work, Module 10 Study Session 2, 2020