BAP32 Corporate Accounting|Fico Ltd

The depreciation rates for accounting and taxation are 15% p.a. and 25% p.a. respectively. Deposits are taxable when received, and warranty costs are deductible when paid. An allowance for doubtful debts of $25 000 has been raised against accounts receivable for accounting purposes, but such debts are deductible only when written off as uncollectable.Required1.Calculate the temporary differences for Jackson Ltd as at 30 June 2020. Justify your classification of each difference as either a deductible temporary difference or a taxable temporary difference.2.Prepare a deferred tax worksheet and the journal entry to record deferred tax for the year ended 30 June 2020 assuming no deferred items had been raised in prior years.Case 3: Consolidation worksheet, previously held investment in subsidiary(5%)On 1 August 2018, Eco Ltd acquired 10% of the shares in Fico Ltd for $8000. Eco Ltd used the fair value method to measure this investment with movements in fair value being recognised in profit or loss. At 1 July 2017, the fair value of this investment was $15 400. The original investment in Fico Ltd was due to the fact that Fico Ltd was undertaking research into particular microbiological elements that could influence the profitability of Eco Ltd. With the continuing success of this research, Eco Ltd decided toacquire the remaining shares (cum div.) in Fico Ltd.On 1 July 2017, Eco Ltd made an offer to buy the remaining shares in Fico Ltd for $151 000 cash. This offer was accepted by the shareholders of Fico Ltd. On 1 July 2017, immediately after the business combination, the statement of financial position of Fico Ltd was as follows:On analysing the financial statements of Fico Ltd, Eco Ltd determined that all the assets and liabilities recorded by Fico Ltd were shown at amounts equal to their fair valuesexcept for:The plant and equipment is expected to have a further 4-year life and is depreciated on a straight-line basis. The inventory was all sold by 30 June 2018.Fico Ltd had expensed all the outlays on research and development. Eco Ltd placed a fair value of $12 000 on this asset. Fico Ltd also had reported a contingent liability at 30 June 2017 in relation to claims by customers for damaged goods. Eco Ltd placed a fair value of $3000 on these claims. The research and development is amortised evenly over a 10-year period. The claims by customers were settled in May 2018 for $2800.The company tax rate is 30%.Required(a)Prepare the consolidated financial statements of Eco Ltd at 1 July 2017, immediately after the business combination.(b)Prepare the consolidation worksheet entries at 30 June 
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QUALITY: 100% ORIGINAL PAPER – NO PLAGIARISM – CUSTOM PAPER

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