ACCT6005 Assessment 2 Brief T1 2020.docx Page 1 of 7
| ASSESSMENT BRIEF | |
| Subject Code and Name | ACCT6005 Company Accounting |
| Assessment | Assessment 2 Case Study – Intragroup Transactions |
| Individual/Group | Individual |
| Length | Part A Problem Solving: Practical and Discussion Part B Video Presentation 5 minutes (+/-10%) |
| Learning Outcomes | This assessment addresses the following subject learning outcomes: a) Prepare consolidated financial statements and related accounting entries for incorporated entities |
| Submission | By 11:55pm AEST/AEDT Sunday of Module 5.2 (Week 10) |
| Weighting | 25% |
| Total Marks | 100 Marks |
Context:
| | The assessment will assess the knowledge and skills covered in Module 2 Intragroup Transactions. It will require students to utilise skills from previous modules as well understand reasons for, aspects of and adjustments for intragroup transactions. Students will be required to prepare acquisition analysis, consolidation journal |
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entries and consolidation worksheet for intragroup transactions, and consolidated
financial statements for the group.
Instructions: Case scenario and requirements are on Page 3.
Part A
| | Use the supplied templates for journal entries and consolidation worksheet to design your own correct format for journal entries and consolidation worksheet Show all workings where required Combine all answers into one assessment document. |
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ACCT6005 Assessment 2 Brief T1 2020.docx Page 2 of 7
Part B:
Prepare a video presentation addressing the questions in Part B.
| | Marks will be awarded for your technical understanding of subject content, as well as your communication and presentation skills. The learning rubric on page 6 (next page) details the assessment criteria for the communication and presentation skills. Visual aids can be used to support your presentation although it is required that you present in front of the camera at all times. Reading from notes should be avoided. Please introduce yourself and the purpose of your presentation. |
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Important Note:
Assessments missing Part b) will not be marked since it proves the authenticity of the
student’s work and individual approach to the case study problems as a replacement
for the invigilated Class Test 2.
Submission Instructions:
Part A:
| | Submit the assessment document in a Word or Pdf format including a cover sheet. JPEG files or similar cannot be opened and will not be marked. Submit via the Assessment link in the main navigation menu in ACCT6005 Company Accounting. |
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Part B:
| | Upload your file on Blackboard by reading the instructions contained in the following link: |
https://laureateau.blackboard.com/webapps/blackboard/content/listContentEditable.jsp?content_id=_387629_
1&course_id=_4044_1
ACCT6005 Assessment 2 Brief T1 2020.docx Page 3 of 7
Case Scenario
Alice Ltd acquired all the issued shares of Springs Ltd for $521 760 cash on 1 July 2019. At
this date, the information below was provided:
| | Springs Ltd’s equity comprised of Share Capital, Retained earnings and General Reserve with the following account balances: |
| Share Capital | $161 700 |
| Retained Earnings | 151 200 |
| General Reserve | 72 000 |
• Springs Ltd had recorded Goodwill of $5 760 (see Goodwill account in Consolidation
Worksheet Template).
• Al the identifiable assets and liabilities of Springs Ltd were recorded at fair value
equal to their carrying amounts except Buildings that were considered to have a
further 5-year useful life.
| Carrying amount ($) | Fair value ($) | |
| Buildings (Cost $352 800) | 175 200 | 199 200 |
Other information included:
1) Goodwill: Goodwill relating to the acquisition of Springs Ltd was impaired by $8 640
during the year ended 30 June 2020.
2) Inventories: On 1 April 2020, Springs Ltd sold some inventories to Alice Ltd for $226
800. These inventories had originally cost Springs Ltd $189 000. At 30 June 2020,
50% of these inventories had been sold by Alice Ltd externally. Both companies used
the perpetual method to account for inventory transactions.
3) Plant: On 1 July 2019, Alice Ltd sold an item of plant to Springs Ltd for $126 000. At
this time, the carrying amount of the plant was $96 000. Springs Ltd depreciated the
plant at 20% per annum on cost.
4) Dividends: Dividends of $16 320 were paid in May 2020.
5) The company income tax rate is 30%.
Part A
Problem Solving Practical (40 Marks)
a) Prepare the acquisition analysis at 1 July 2019. Show all workings. (4 marks)
b) Prepare the consolidation worksheet entries at 1 July 2019. Journal narrations
are required. Prepare your journal format based on the template below.
(6 marks)
| Date | Details | Debit ($) | Credit ($) |
ACCT6005 Assessment 2 Brief T1 2020.docx Page 4 of 7
c) Complete the consolidation worksheet for the group at 30 June 2020. Prepare
your consolidation worksheet using the template provided below.
(24 marks)
d) Prepare Consolidated Statement of Financial Performance for the group at 30
June 2020. (6 marks)
Alice Ltd Group
Consolidation Worksheet at 30 June 2020
| Alice Ltd |
Springs Ltd |
Ref | Adjustments | Ref | Group ($) |
| Dr ($) | Cr ($) | ||||
| Sales revenue | 1 843 200 | 950 400 | |||
| Cost of sales | (1 464 960) | (795 840) | |||
| Gross profit | 378 240 | 154 560 | |||
| Proceeds from sale of Plant |
126 000 | – | |||
| Dividend revenue | 16 320 | – | |||
| Interest revenue | – | 5 760 | |||
| Depreciation – Building | |||||
| Depreciation – Plant | (53 760) | (31 200) | |||
| Carrying amount of Plant sold |
(100 800) | – | |||
| Impairment loss – Goodwill |
– | – | |||
| Interest expense | (32 640) | (12 480) | |||
| Profit before tax | 333 360 | 116 640 | |||
| Income tax expense | (72 240) | (31 200) | |||
| Profit after tax | 261 120 | 85 440 | |||
| Retained earnings (1/7/19) |
269 760 | 151 200 | |||
| Dividend paid | (24 960) | (16 320) | |||
| Dividend declared | (50 400) | – | |||
| Retained earnings (30/6/20) |
455 520 | 220 320 | |||
| Share capital | 288 000 | 161 700 | |||
| General reserve | 96 000 | 72 000 | |||
| BCVR | – | – | |||
| Shareholders’ equity | 839 520 | 454 020 | |||
| Liabilities | |||||
| Accounts payable | 220 800 | 48 960 |
ACCT6005 Assessment 2 Brief T1 2020.docx Page 5 of 7
| Dividend payable | 50 400 | – |
| Long-term loan | 782 880 | 60 960 |
| Deferred tax liabilities | 32 640 | – |
| Total liabilities | 1 086 720 | 109 920 |
| Total Liabilities & Equity |
1 926 240 | 563 940 |
| Assets | ||
| Cash | 75 840 | 36 000 |
| Accounts receivable | 25 920 | 12 480 |
| Inventories | 255 360 | 158 400 |
| Deferred tax assets | – | – |
| Land | 400 800 | 89 700 |
| Plant | 306 240 | 162 240 |
| Acc’d Dep’n – Plant | (84 480) | (75 840) |
| Buildings | 540 000 | 352 800 |
| Acc’d Dep’n – Buildings | (115 200) | (177 600) |
| Goodwill | – | 5 760 |
| Acc’d Imp losses – Goodwill |
– | – |
| Investment in Springs Ltd |
521 760 | – |
| Total assets | 1 926 240 | 563 940 |
Problem Solving Discussion (40 Marks)
Using the case scenario above and your responses to Part (1):
a) In Transaction No. 2 Inventories, assuming Alice Ltd sold the remaining inventory in
the year ended 30 June 2021. Discuss the tax effects of this transaction on the group
for the years ended 30 June 2020 and 30 June 2021. (15 Marks)
b) In Transaction No. 2 Inventories, assuming Alice Ltd sold all the inventories bought
from Springs Ltd on 1 April 2020 by 30 June 2020. Discuss the tax effects of this
transaction on the group for the years ended 30 June 2020 and 30 June 2021.
(5 Marks)
c) In Transaction No. 2 Inventories, assuming Alice Ltd classifies the inventory as a noncurrent asset and depreciates this asset on a straight-line basis for five years. Discuss
the tax effects on the group for the years ended 30 June 2020 and 30 June 2021.
(20 Marks)
ACCT6005 Assessment 2 Brief T1 2020.docx Page 6 of 7
Part B Presentation (20 Marks)
In a video recording, explain verbally the following:
a) The consolidation worksheet entries related to Transaction No.3 Plant in Part A
for each of the years following the intragroup transaction until Plant is fully
depreciated by Springs Ltd. (10 Marks)
b) Differences and similarities between the consolidation worksheet entries required
for an intragroup sale of a non-current asset classified by the buying entity as a noncurrent asset, and classified by the buying entity as inventory. (10 Marks)
ACCT6005 Assessment 2 Brief T1 2020.docx Page 7 of 7
Learning Rubric: Assessment 2 Part B Communication Skills
| Assessment Attributes | Fail (0-49%) (Marks 0-9.9) |
Pass (50-64%) (Marks 10-12.9) |
Credit (65-74%) (Marks 13-14.9) |
Distinction (75– 84%) (Marks 15 -16.9 |
High Distinction (85-100%) (Marks 17-20) |
| Part B Presentation 20 Marks (20%) |
Difficulty/failure in explaining rationale for selected accounting tools and processes. Presenter does not appear rehearsed. Presenters nonverbal communication distracts from the presentation. Presenter reads directly from notes. Language and presented of very low level. Not completed. |
Evidence of attempts to communicate clearly the rationale and application of selected accounting tools and processes. Presenter appears somewhat rehearsed. Presenter is frequently reliant on notes. |
Mostly clear and understandable presentation proving a good understanding of the relevant accounting tools and processes with minor errors. Presenter appears rehearsed and prepared. Well-groomed and confident with some exceptions. Presenter is not reliant on notes but uses them. |
Clearly presented and adequately justified, proving advanced understanding of the relevant accounting tools and processes. Presenter appears rehearsed and well prepared. Well-groomed and confident. Presenter is not reliant on notes. |
Clearly presented and adequately substantiated, indicating an excellent understanding and application of the relevant accounting tools and processes. Presenter appears fully rehearsed and well prepared. Well groomed and confident. Presenter is not reliant on notes and does not appear to have memorised the presentation. |
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