BUACC2603 Corporate Accounting Semester 1
BUACC2603 Corporate Accounting
Semester 1, 2012
Assessment weight: 25%
Due Date: Week 10
Length: 1000 words
Group Assignment: 2 people
Format: Part A – Report
Part B – Consolidated worksheet and journals
Part A (15%)
If we look at a reporting entitys balance sheet we will see a total given for all the entitys assets (this is a requirement of AASB101). This aggregate total is derived by adding together the various classes of current and non-current assets. Do you think it is appropriate that the various classes of assets are simply added together, even though they have probably been measured on a number of quite different measurements bases? (Deegan, 2010)
What does the aggregated total actually represent?Justify your answer by giving examples (e.g. inventory valuation AASB102 and property, plant and equipment AASB116).
What alternative/s would you recommend?
1000 words max.
Critical evaluation of topic
Referencing, citations (5)
Evidence of reading,
quality and quantity (10)
coherence, grammar and
spelling. Logical flow of
90/6 = 15%
Part B (10%)
Alpha Ltd owns 100% of the shares of Belmont Ltd, acquired on 1 July 2010 for $3.5 million when the shareholders funds of Belmont Ltd were:
All assets of Belmont Ltd are fairly stated at acquisition date.
The directors believe that there has been an impairment loss on the goodwill of $35,000 for the year ended 30 June 2011.
During the 2011 financial year, Belmont Ltd sells inventory to Alpha Ltd at a sales price of $700,000. The inventory cost Belmont Ltd $420,000 to produce. At 30 June 2011, half of the inventory is still on hand with Alpha Ltd.
The tax rate is 30%.
The accounts of Alpha Ltd and Belmont Ltd as 30 June 2011 are as follows;
Less: cost of goods sold
Less: other expenses
Profit after tax
1 July 2010
30 June 2011
30 June 2011
Investment in Belmont Ltd
Deferred tax asset
Prepare the consolidated journals for Alpha Ltd and its controlled entity for 2011 Use the above worksheet and complete the consolidated statement.
a. Determine goodwill or gain on acquisition
b. Eliminate inter-company sales transaction.
c. Eliminate unrealized profit in closing inventory
d. Adjust the tax expense for unrealized profit or losses
e. Eliminate dividend paid by Belmont to Alpha
f. Impair goodwill
Each pair of students is to submit a single assignment (essay and consolidate worksheet) for which the two students will usually receive the same mark. This is based on the expectation that each student will contribute equally to the preparation of the assignment. Where this expectation has not been satisfied separate marks may be allocated.
Selected students may be invited to discuss their assignment with the person responsible for marking it. This discussion will only be taken into account in marking assignment where it provides evidence that the integrity of students work has been compromised. This may, for example, be evidenced by students being unable to explain the meaning of their assignment, or being unable to explain why certain information has been included.
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