ASSESSMENT BRIEF Subject Code and Name ACCT6005 Company Accounting Assessment Assessment 1 Case Study - Fair Value Individual/Group Individual Length Part A Problem Solving: Practical Application 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 4.2 (Week 8) Weighting 25% Total Marks 100 Marks Context: Test coverage: Module 1.1 Introduction to Consolidation and Module 1.2 Principles of Consolidation You are required to demonstrate understanding of the principles of consolidation, the nature of the group, and adjustments required in the consolidation worksheet. You will be assessed on your ability to prepare: acquisition analysis, consolidation journal entries, consolidation worksheet, and consolidated financial statements 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 of journal entries and consolidation worksheet Show all workings where required Combine all answers into one assessment document. ACCT6005 Assessment 1 Brief T1 2020.docx Page 1 of 6 Part B Prepare a video presentation to answer the questions in Part b. Marks will be awarded for your technical understanding of subject content, as well the presentation itself. 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. 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 1. Submission Instructions: Part A Submit the assessment document in one 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. 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 1 Brief T1 2020.docx Page 2 of 6 Case Scenario On 1 July 2019, Seacome Ltd acquired all issued shares of Heights Ltd on a cum dividend basis, paying $578 160 cash. At this date, Heights Ltd had recorded $24 000 dividend payable and an equity consisting of: Share capital Retained earnings General reserve $259 200 172 800 86 400 All the identifiable assets and liabilities of Heights Ltd were recorded at the amounts equal to their fair values at acquisition date except for: Asset Inventories Plant (cost $480 000) Carrying Amount ($) 67 200 444 000 Fair Value ($) 76 800 451 200 Additional information: The plant was considered to have a further 5-year life, and depreciated at 20% per annum on cost. All inventories were sold by 30 June 2020. In April 2020, Heights Ltd transferred $14 400 from Retained Earnings existing at 1 July 2019 to General Reserve. The dividend payable at the acquisition date was paid in May 2020. The company tax rate is 30%. Part A Problem Solving Practical (45 Marks) i. Prepare the acquisition analysis at 1 July 2019. Show all workings. ii. Prepare the consolidation worksheet entries at 1 July 2019. Journal narrations are required. Prepare your journal format based on the template below. (11 Marks) Date Details Debit ($) (4 Marks) Credit ($) iii. Complete the consolidation worksheet for the group at 30 June 2020. Prepare your consolidation worksheet using the template provided below. (15 Marks) iv. Prepare Consolidated Statement of Changes in Equity and Consolidated Statement of Financial Position for the group at 30 June 2020. (15 Marks) ACCT6005 Assessment 1 Brief T1 2020.docx Page 3 of 6 Seacome Group Ltd Consolidation Worksheet at 30 June 2020 Revenue Costs of sales Depreciation - Plant Other expenses Profit before tax Income tax expense Profit Retained earnings (1/7/19) Transfer from BCVR Transfer from General reserve Retained earnings (30/6/20) Share capital BCVR General reserve Total Equity Deferred tax liability Other liabilities Total Liabilities Total Equity & Liab Cash Inventories Land Plant Acc'd depreciation Goodwill Shares in Heights Ltd Total Assets Seacome Ltd ($) 1 200 000 (432 000) Heights Ltd ($) 266 400 (110 400) (192 000) 576 000 (268 800) (96 000) 60 000 (20 160) 307 200 384 000 39 840 172 800 (0) (14 400) 691 200 198 240 1 816 800 - 259 200 - 48 000 100 800 2 556 000 558 240 204 000 204 000 2 760 000 9 600 28 800 38 400 596 640 90 720 147 120 768 000 1 728 000 (528 000) 18 000 47 760 86 400 602 880 (158 400) 554 160 2 760 000 596 640 ACCT6005 Assessment 1 Brief T1 2020.docx Adjustments Dr ($) Cr ($) Group ($) Page 4 of 6 Problem Solving Discussion (35 Marks) Using the case scenario above and your responses to Part (a): i. Identify the adjustment entries, which are made in the consolidation worksheet for Seacome Group Ltd for the year ended 30 June 2020, will also be made in the group's consolidation worksheet for the year ended 30 June 2021 and 30 June 2022. Discuss the effects of these adjustment entries on the group's consolidation worksheet. (20 Marks) ii. Discuss how the business combination valuation entries affect the pre-acquisition entries at the acquisition date and in the year ended 30 June 2020. You should make references to the relevant assets and liabilities in Seacome Group Ltd. (15 Marks) Part B Video Presentation (20 Marks) Prepare a video recording of maximum 5 minutes, explain verbally the following: a) How have you completed the consolidation worksheet for Seacome Group Ltd at 30 June 2020 in Part 1 (c) (10 Marks) b) How the adjustment entries in Part 2 (a) affect the consolidation worksheet of Seacome Group Ltd at 30 June 2020 and at 30 June 2021 (10 Marks) ACCT6005 Assessment 1 Brief T1 2020.docx Page 5 of 6 Learning Rubric: Assessment 1 Part B Assessment Attributes Part B Presentation 20 Marks (20%) Fail (0-49%) (Marks 0-9.9) 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. Pass (50-64%) (Marks 10-12.9) 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. Credit (65-74%) (Marks 13-14.9) 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. ACCT6005 Assessment 1 Brief T1 2020.docx Page 6 of 6 Distinction (75- 84%) (Marks 15 -16.9 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. High Distinction (85-100%) (Marks 17-20) 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