i will pay 30 looking for

i. The consolidation journal entries (10 marks) ii. The consolidation worksheet (10 marks)

answer

Q 2. Consolidation (40 marks) Financial information at 30 June 2016 of Starr Ltd and its subsidiary company, Lennon Ltd include that shown below. At 1 July 2013, the date Starr Ltd acquired its 80% shareholding in Lennon Ltd, all the identifiable assets and liabilities of Lennon Ltd were at fair value except for the following assets: Carrying Amount Fair Value Plant (cost $75 000) $ 50 000 $ 55 000 Land 30 000 38 000 The plant has an expected life of 10 years, with benefits being received evenly over that period. Differences between carrying amounts and fair values are adjusted on consolidation. The land on hand at 1 July 2013 was sold on 1 February 2014 for $40,000. Any valuation reserve in relation to the land is transferred on consolidation to retained earnings. Starr Ltd uses the full goodwill method. The fair value of the non-controlling interest at 1 July 2013 was $31,500. Financial Information at 30 June 2016 Starr Ltd Lennon Ltd Sales revenue $316,000 $220,000 Other revenue: Debenture interest 5,000 - Management and consulting fees 5,000 - Dividend from Lennon Ltd 12,000 - Total revenues 338,000 220,000 Cost of sales 130,000 85,000 Manufacturing expenses 90,000 60,000 Depreciation on plant 15,000 15,000 Administrative 15,000 8,000 Financial 11,000 5,000 Other expenses 14,000 12,000 Total expenses 275,000 185,000 Profit before tax 36,000 35,000 Assignment: 2103AFE Company Accounting, Trimester 2 2017 3 Starr Ltd Lennon Ltd Income tax expense (25,000) (17,000) Profit 38,000 18,000 Retained earnings (1/07/15) 50,000 45,000 88,000 63,000 Transfer to general reserve 3,000 - Interim dividend paid 10,000 10,000 Final dividend declared 10,000 5,000 23,000 15,000 Retained earnings (30/06/16) 65,000 48,000 General reserve 50,000 10,000 Other components of equity 13,000 10,000 Share capital 300,000 100,000 Debentures 200,000 100,000 Current tax liability 25,000 17,000 Dividend payable 10,000 5,000 Deferred tax liability - 7,000 Other liabilities 90,000 12,000 $ 753,000 $ 309,000 Financial assets 50,000 60,000 Debentures in Lennon Ltd 100,000 - Shares in Lennon Ltd 131,600 - Plant (cost) 120,000 102,000 Accumulated depreciation - plant (65,000) (55,000) Other depreciable assets 76,000 55,000 Accumulated depreciation (40,000) (25,000) Inventory 90,000 85,000 Deferred tax asset 85,400 30,000 Land 201,000 57,000 Dividend receivable 4,000 - $ 753,000 $ 309,000 Additional information i. At the date of acquisition of 80% of its issued shares by Starr Ltd, the equity of Lennon Ltd was: Share Capital (100,000 shares) $100,000 General reserve 3,000 Retained earnings 37,000 ii. Inventory on hand of Lennon Ltd at 1 July 2015 included a quantity priced at $10,000 that had been sold to Lennon Ltd by its parent. This inventory had cost Starr Ltd $7,500. It was all sold by Lennon Ltd during the year. iii. During the year, intragroup sales by Lennon Ltd to Starr Ltd were $60,000. iv. An item of inventory of Lennon Ltd has been sold to Starr Ltd for $20,000 on 1 January 2015. Starr Ltd has treated this item as an addition to plant and machinery. The item was put into service as soon as it was received by Starr Ltd and depreciation charged at 20% p.a. The item had been fully imported by Lennon Ltd at a total cost of $15,000. Assignment: 2103AFE Company Accounting, Trimester 2 2017 4 v. Management and consulting fees derived by Starr Ltd were all from Lennon Ltd and represented charges made for administration $2,300 and technical services $2,700, with the latter charged by Lennon Ltd to manufacturing expenses. vi. All debentures issued by Lennon Ltd are held by Starr Ltd. vii. Other components of equity relate to movements in the fair values of the financial assets. The balance of this account at 1 July 2015 was $10,000 (Starr Ltd) and $8,000 (Lennon Ltd). viii. The tax rate is 30%. Required 1. Prepare: i. The acquisition analysis (using the full goodwill method); (6.5 marks) ii. The business combination valuation entries; (4.75 marks) iii. The pre-acquisition entries. (2.5 marks) 2. Calculate NCI share of equity at: i. 1 July 2013; (1.5 marks) ii. 1 July 2013 - 30 June 2015; (2.25 marks) iii. 1 July 2015 - 30 June 2016. (2.5 marks) 3. For the year ended 30 June 2016, prepare: i. The consolidation journal entries (10 marks) ii. The consolidation worksheet (10 marks)

2103AFE Company Accounting Group Assignment Trimester 2, 2017 This assignment requires students to prepare the consolidated financial statements in accordance with AASB 10 Consolidated Financial Statements and to answer basic concepts from the Accounting for Income Tax topic. DUE DATES: Assignment: SPARK ratings: TOTAL WEIGHTING: 8 September, 2017 15 September, 2017 20% This piece of assessment task will consist of Part A- Group work (10%) and Part B- Self & Peer assessment (10%). Part A (10%). The aim of Part A is to apply the knowledge and understanding of Consolidation from lectures and workshops in a practical and detailed manner. The assignment is to be completed in groups of three or four. Students will sign up in a group on Learning@Griffith from Week 4. Part B (10%). This assignment involves the completion of Self and Peer Assessment Ratings and feedbacks using SPARKplus. All information pertaining to SPARKplus is located in the Learning@Griffith course site under Assessment>>SPARKplus Student Resources. Please see the attached rubric for Part B that shows you how the ratings will be assessed. Students who do not rate to their peers (group members) or provide feedback to their peers, will receive 0% in the assessment. REQUIREMENTS: 1. Students are required to complete the assignment in a group. 2. All answers must use proper English, expression and grammar. The assignment must be word-processed using Microsoft Word or Excel, Times New Roman, 12 point font. 3. Students must complete the Self & Peer Assessment Resource Kit (SPARK) Ratings of themselves and each of the group members [see Part B above for details]. Final ratings must be completed by the due date shown above. 4. The assignment is to be submitted on-line by the due date. SUBMISSION: 1. Detailed instructions on how to submit the assignment is available in the Course Home Tab/Assignment Submission on Learning@Griffith. 2. Only one group assignment is to be submitted by the group (only one member submits the assignment on behalf of the group). 3. The assignment should be submitted on-line through the assignment submission tab available on Learning@Griffith and only one assignment is to be submitted per group and each group member must complete the electronic assignment cover sheet. Please refer to Learning@Griffith for further details. 4. Each group member must complete an Academic Integrity Declaration. Assignment: 2103AFE Company Accounting, Trimester 2 2017 1 Assignment (50 marks, worth 20%) Q 1. Income Tax (10 marks) Accounting profit is based on a full accrual model whereas taxable profit is based on a partial accrual model. Explain this comment by reference to the following items: long service leave (2.5 marks) doubtful debts (2.5 marks) prepaid insurance (2.5 marks) rent received in advance. (2.5 marks) (Maximum 250 words. No references are required) Q 2. Consolidation (40 marks) Financial information at 30 June 2016 of Starr Ltd and its subsidiary company, Lennon Ltd include that shown below. At 1 July 2013, the date Starr Ltd acquired its 80% shareholding in Lennon Ltd, all the identifiable assets and liabilities of Lennon Ltd were at fair value except for the following assets: Carrying Amount $ 50 000 30 000 Plant (cost $75 000) Land Fair Value $ 55 000 38 000 The plant has an expected life of 10 years, with benefits being received evenly over that period. Differences between carrying amounts and fair values are adjusted on consolidation. The land on hand at 1 July 2013 was sold on 1 February 2014 for $40,000. Any valuation reserve in relation to the land is transferred on consolidation to retained earnings. Starr Ltd uses the full goodwill method. July 2013 was $31,500. The fair value of the non-controlling interest at 1 Financial Information at 30 June 2016 Sales revenue Other revenue: Debenture interest Management and consulting fees Dividend from Lennon Ltd Total revenues Cost of sales Manufacturing expenses Depreciation on plant Administrative Financial Other expenses Total expenses Profit before tax Assignment: 2103AFE Company Accounting, Trimester 2 2017 Starr Ltd $316,000 Lennon Ltd $220,000 5,000 5,000 12,000 338,000 220,000 130,000 90,000 15,000 15,000 11,000 14,000 275,000 36,000 85,000 60,000 15,000 8,000 5,000 12,000 185,000 35,000 2 Starr Ltd (25,000) 38,000 50,000 88,000 Lennon Ltd (17,000) 18,000 45,000 63,000 3,000 10,000 10,000 23,000 10,000 5,000 15,000 $ 65,000 50,000 13,000 300,000 200,000 25,000 10,000 90,000 753,000 $ 48,000 10,000 10,000 100,000 100,000 17,000 5,000 7,000 12,000 309,000 $ 50,000 100,000 131,600 120,000 (65,000) 76,000 (40,000) 90,000 85,400 201,000 4,000 753,000 $ 60,000 102,000 (55,000) 55,000 (25,000) 85,000 30,000 57,000 309,000 Income tax expense Profit Retained earnings (1/07/15) Transfer to general reserve Interim dividend paid Final dividend declared Retained earnings (30/06/16) General reserve Other components of equity Share capital Debentures Current tax liability Dividend payable Deferred tax liability Other liabilities Financial assets Debentures in Lennon Ltd Shares in Lennon Ltd Plant (cost) Accumulated depreciation - plant Other depreciable assets Accumulated depreciation Inventory Deferred tax asset Land Dividend receivable Additional information i. At the date of acquisition of 80% of its issued shares by Starr Ltd, the equity of Lennon Ltd was: Share Capital (100,000 shares) $100,000 General reserve 3,000 Retained earnings 37,000 ii. Inventory on hand of Lennon Ltd at 1 July 2015 included a quantity priced at $10,000 that had been sold to Lennon Ltd by its parent. This inventory had cost Starr Ltd $7,500. It was all sold by Lennon Ltd during the year. iii. During the year, intragroup sales by Lennon Ltd to Starr Ltd were $60,000. iv. An item of inventory of Lennon Ltd has been sold to Starr Ltd for $20,000 on 1 January 2015. Starr Ltd has treated this item as an addition to plant and machinery. The item was put into service as soon as it was received by Starr Ltd and depreciation charged at 20% p.a. The item had been fully imported by Lennon Ltd at a total cost of $15,000. Assignment: 2103AFE Company Accounting, Trimester 2 2017 3 v. Management and consulting fees derived by Starr Ltd were all from Lennon Ltd and represented charges made for administration $2,300 and technical services $2,700, with the latter charged by Lennon Ltd to manufacturing expenses. vi. All debentures issued by Lennon Ltd are held by Starr Ltd. vii. Other components of equity relate to movements in the fair values of the financial assets. The balance of this account at 1 July 2015 was $10,000 (Starr Ltd) and $8,000 (Lennon Ltd). viii. The tax rate is 30%. Required 1. Prepare: i. ii. iii. The acquisition analysis (using the full goodwill method); The business combination valuation entries; The pre-acquisition entries. (6.5 marks) (4.75 marks) (2.5 marks) 2. Calculate NCI share of equity at: i. ii. iii. 1 July 2013; 1 July 2013 - 30 June 2015; 1 July 2015 - 30 June 2016. (1.5 marks) (2.25 marks) (2.5 marks) 3. For the year ended 30 June 2016, prepare: i. The consolidation journal entries (10 marks) ii. The consolidation worksheet (10 marks) Assignment: 2103AFE Company Accounting, Trimester 2 2017 4 Assignment: 2103AFE Company Accounting, Trimester 2 2017 5