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澳洲English ACCOUNTING ASSIGNMENT
论文题目：ACCOUNTING
论文语言：English
论文专业：ACCOUNTING
字数：2000
学校国家：Australia
是否有数据处理要求：否
您的学校：大二
论文用于：BA assignment 本科课程作业
截止日期：2010-5-20
ACCOUNTING (FINANCIAL) 260
MAJOR ASSIGNMENT
SEMESTER 1 2010
DUE IN TUTORIAL WEEK
BEGINNING 24 MAY 2010
QUESTION 1- BUSINESS COMBINATION (25 MARKS)
Red Ltd is seeking to expand its share of the cosmetics market and has negotiated to acquire the operations of Lip Ltd.
At 1 July 2009, the trial balances of the two companies were as follows:
Red Ltd LipLtd
Cash $145 000 $ 5 200
Accounts receivable 34 000 21 300
Inventory 53 000 30 000
Shares in listed companies 16 000 22 000
Land and building (net) 70 000 40 000
Plant and equipment (net) 130 000 105 000
Goodwill (net) 6 000 5 000
Accounts payable $456 000
$65 000 $228 500
$ 40 000
Debentures 50 000 0
Mortgage loan 100 000 30 000
Contributed equity:
Ordinary shares of $1, fully paid 200 000 150 000
Other reserves 15 000 6 500
Retained earnings (30/6/09) 27 000 2 000
$457 000 $228 500
Red Ltd is to acquire all assets (except cash and shares in listed companies) of Lip Ltd. Acquisition-related costs are expected to be $7,600. The net assets of Lip Ltd are recorded at fair value except for the following:
Carrying amount Fair Value
Inventory $ 30 000 $ 26 000
Land and buildings 40 000 80 000
Shares in listed companies 22 000 18 000
Accounts payable (40 000) (49 100)
Accrued leave 0 (29 700)
In exchange, the shareholders of Lip Ltd are to receive, for every three Lip Ltd shares held, one Red Ltd share worth $2.50 each. Costs to issue these shares are $950. Additionally, Red Ltd will transfer to Lip Ltd its ‘Shares in Listed Companies’ asset, which has fair value of $15,000. These shares, together with those already owned by Lip Ltd, are sold and the proceeds distributed to the Lip Ltd shareholders. Assume that the shares were sold for their fair values.#p#分页标题#e#
Red Ltd will also give Lip Ltd sufficient additional cash to enable Lip Ltd to pay all its creditors. Lip Ltd will then liquidate. Liquidation costs are estimated to be $8,700.
Required
1. Prepare the acquisition analysis and journal entries to record the acquisition in the records of Red Ltd.
(10 marks)
2. Prepare the liquidation account and shareholders’ distribution account for Lip Ltd.
( 15 marks)
QUESTION 2 – CONSOLIDATION (25 MARKS)
On 1 July 2010, Blue Ltd acquired all the shares of Stick Ltd for $330,000 on an ex-div basis. On this date, the equity and liabilities of Stick Ltd included the following balances:
Share capital $200 000
General reserve 25 000
Retained Earnings 45 000
Dividend payable 10 000
Provisions 129 500
At acquisition date, all the identifiable assets and liabilities of Stick Ltd were recorded at amounts equal to fair value except for:
Carrying Fair
Amount Value
Inventory $70 000 $80 000
Plant & equipment (cost $260,000) 146 000 150 000
Machinery (cost $18 000) 15 000 16 000
Trademark 100 000 110 000
Land 50 000 70 000
Goodwill 25 000 55 000
Goodwill was not impaired in any period. The plant and equipment had a further five year life at acquisition date and was expected to be used evenly over that time. The trademark was considered to have an indefinite life. The machinery, which was estimated to have a further four year life at acquisition date, was sold on 1 January 2012. Any adjustments for differences between carrying amounts at acquisition date and fair values are made on consolidation.
During the year ended 30 June 2011, all inventories on hand at acquisition date were sold, and the land was sold on 1 June 2012. Any valuation reserves created are transferred on consolidation to retained earnings when assets are sold or fully consumed.
Additional information:
(i) Shareholder approval is not required in relation to dividends.#p#分页标题#e#
(ii) On 1 July 2011, Stick Ltd has on hand inventory worth $12 000, being transferred from Blue Ltd in June 2011. The inventory had previously cost Blue Ltd $8 000.
(iii) On 31 March 2012, Stick Ltd transferred an item of plant with a carrying amount of $10 000 to Blue Ltd for $15 000. Blue Ltd treated this item as inventory. The item was still on hand at the end of the year. Stick Ltd applied a 20% depreciation rate to this plant.
(iv) On 1 January 2012, Stick Ltd acquired $8 000 inventory from Blue Ltd. This inventory originally cost Blue Ltd $5 000. The profit in inventory of hand at 30 June 2012 was $1 000.
(v) During the year ending 30 June 2012, Stick Ltd sold inventory costing $12 000 to Blue Ltd for $18 000. One third of this was sold to external parties for $9 000. http://www.hsltc.com
(vi) On 1 January 2011, Blue Ltd sold furniture to Stick Ltd for $8 000. This had originally cost Blue Ltd $12 000 and had a carrying amount at the time of sale of $7 000. Both entities charge depreciation at a rate of 10% p.a.
(vii) Blue Ltd sold some land to Stick Ltd in December 2011. The land had originally cost Blue Ltd $25 000, but was sold to Stick Ltd for only $20 000. To help Stick Ltd pay for the land, Blue Ltd gave Stick Ltd an interest-free loan of $12 000. Stick Ltd has as yet made no repayments on the loan.
(viii) The tax rate is 30%.
On 30 June 2012 the trial balances of Blue Ltd and Stick Ltd were as follows:
Blue Ltd Stick Ltd
Shares in Stick Ltd $330 000 -
Cash 2 800 $40 000
Receivables 6 000 20 000
Inventory 20 000 50 000
Deferred tax assets 10 200 -
Machinery 15 000 15 000
Plant & equipment 113 000 300 000
Land 25 000 50 000
Furniture 7 000 8 000
Trademark - 100 000
Goodwill - 25 000
Cost of sales 162 000 128 000
Other expenses 53 000 31 000
Income tax expense 20 000 18 000
Interim dividend paid 12 000 5 000
Final dividend declared 6 000 4 000
Loan to Stick Ltd 12 000 -
794 000 794 000
Share capital 312 000 200 000
General Reserve 20 000 25 000#p#分页标题#e#
Retained earnings (1/7/11) 30 000 75 000
Final Dividend Payable 6 000 4 000
Current Tax Liabilities 8 000 2 500
Provisions 78 000 169 500
Loan from Blue Ltd - 12 000
Sales 220 000 152 000
Other income 84 000 35 000
Accumulated depreciation – P & E 34 000 114 000
Accumulated depreciation – Machinery 1 000 3 000
Accumulated depreciation – Furniture 1 000 2000
$794 000 $794 000
Required
a) Prepare the acquisition analysis at 1 July 2010. ( 5 Marks)
b) Prepare the consolidation worksheet entries at 30 June 2012.
(12 marks)
c) Complete the worksheet below. (8 Marks)
Financial Statements Blue
Ltd Stick
Ltd Adjustments Group
Dr Cr
Sales revenue 220 000 152 000
Other income 84 000 35 000
304 000 187 000
Cost of sales 162 000 128 000
Other expenses 53 000 31 000
215 000 159 000
Profit before tax 89 000 28 000
Tax expense 20 000 18 000
Profit 69 000 10 000
Retained earnings
(1/7/11) 30 000 75 000
Transfer from BCV reserve -- --
99 000 85 000
Dividend paid 12 000 5 000
Dividend declared 6 000 4 000
000 9 000
Retained earnings
(30/6/12) 81 000 76 000
Share capital 312 000 200 000
General Reserve 20 000 25 000
BCVR - -
Total Equity 413 000 301 000 #p#分页标题#e#
DTL - -
Dividend Payable 6 000 4 000
Current Tax Liability 8 000 2 500
Loan from Blue Ltd - 12 000
Provisions 78 000 169 500
Total Liabilities 92 000 188 000
Total Liabilities + Equity 505 000 489 000
Blue
Ltd Stick
Ltd Adjustments Group
Dr Cr
Shares in Stick Ltd 330 000 --
Cash 2 800 40 000
Receivable 6 000 20 000
Inventory 20 000 50 000
Land 25 000 50 000
Plant & Equipment 113 000 300 000
Accumulated depreciation – P & E (34 000) (114 000)
Machinery 15 000 15 000
Accumulated depreciation – Mach. (1 000) (3 000)
Furniture 7 000 8 000
Accumulated depreciation – Furn. (1 000) (2 000)
Trademark 100 000
Goodwill - 25 000
Deferred tax asset 10 200 -
Loan to Stick Ltd 12 000 -
Total assets 505 000 489 000
END OF ASSIGNMENT
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