ACC3100 Corporate Accounting | My Assignment Tutor

ACC3100 Corporate Accounting Final Examination – Trimester 1, 2021 Assessment Type: Take-Home Examination Weighting: 45% Learning Outcomes Assessed: ULO 1, 2, 3 and 4 Due Date: 14 June 2021 (Monday) 11:59 pm (ASET) Please type your answers after each question and save the file as Word document. All submissions must be submitted via Moodle. Late submission will not be accepted. Question 1 (10 + 2 = 12 marks) Eclipse Ltd made an offer to the public for investors to subscribe for 1,000,000 shares. The shares were issued at $10.00 per share. Applications for shares closed on 10 April 20X0, with $5.00 being paid on application and a further $5.00 being payable within one month of allotment. By 10 April 20X0 applications had been received for 1,100,000 shares, and it is decided that all subscribers will receive shares on a pro rata basis, with any excess paid on application to be offset against the amount due on allotment. The shares were allotted on 25 April 20X0. Required: Provide the journal entries to account for the above events. (10 marks)What are share splits? What accounting entries are necessary when a share split is undertaken? (2 marks) Question 2 (10 + 2 = 12 marks) Conquest Ltd owns two blocks of residual land acquired in 20X2 for the purposes of future residential development. Block L cost $500,000 and Block S cost $175,000. Valuations of the blocks are undertaken by an independent valuer on 30 June 20X4 and 30 June 20X6. The assessed values are:  20X4 valuation20X6 valuationBlock L$460,000$580,000Block S$185,000$170,000 Required: Assuming asset revaluations were undertaken for the land in both 20X4 and 20X6, provide the journal entries for both years. (10 marks)What effect will an asset revaluation have on subsequent periods’ profits? Explain. (2 marks) Question 3 (2 + 2 + 3 + 2 = 9 marks) Tempest Ltd has accounts receivable of $900,000 and an associated doubtful debts allowance of $180,000. The revenue associated with the accounts receivable of $900,000 has already been included in taxable income. The doubtful debts will be deductible when the amount is actually written off as bad with a related deduction to accounts receivable. Required: Assuming that the tax rate is 30 per cent, what is the amount of the temporary difference? (2 marks)Does this give rise to a deferred tax asset or a deferred tax liability, and what is the amount of the deferred tax asset/liability? (2 marks)Fleece Ltd has a depreciable non-current asset that cost $30,000 and has a carrying amount of $20,000. For tax purposes, accumulated depreciation amounts to $18,000. Required: Assuming that the tax rate is 30 per cent, what is the amount of the temporary difference? (3 marks)Does this give rise to a deferred tax asset or a deferred tax liability, and what is the amount of the deferred tax asset/liability? (2 marks) Question 4 (10 + 2 = 12 marks) Pete Limited acquired Samson Limited on 1 July 20X7 for cash of $3,500,000. At that date, Samson Limited’s net identifiable assets had a fair value of $2,900,000. The fair value of the net identifiable assets of Samson Limited are determined as follows: Customer List             $25,000 Machinery                   $725,000 Buildings                     $750,000 Land                            $1,500,000                                     $3,000,000 Less: Bank Loan         $100,000 Net Assets                   $2,900,000 At the end of the reporting period of 30 June 20X8, the management of Pete Limited determines that the recoverable amount of the cash-generating unit, which is considered to be Samson Limited, totals $2,400,000. The carrying amount of the net identifiable assets of Samson Limited, which excludes goodwill, has not changed since acquisition and is $2,900,000. Required: Prepare the journal entry to account for any impairment of goodwill. (10 marks)What is the difference between an unidentifiable intangible asset and an identifiable intangible asset? (2 marks) END OF EXAM PAPER

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