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CNACC2CRE Financial Accounting and Reporting Assignment Sample
1. This assignment is compulsory and is worth 20% of the marks of the subject. There are two questions in the assignment worth 40 marks and students acquired marks will be converted into 20%.
2. The assignment must be submitted via Turnitin.
3. Students must provide their names and ID numbers in cover page of the assignment.
4. You must keep a copy of your assignment until you receive the marked original back.
5. The assignment must be in MS word format, double-spacing and 12-pt Times New Roman font.
6. Submissions must be properly referenced and students are required to use either an APA or Harvard referencing style
7. Word limit: 700 words excluding references. The total word number for Question 1 is 200. The number of words can be 10% more or less without penalty.
8. Plagiarism is a serious academic misconduct. Students involved in plagiarism will be referred to the University’s appropriate authority.
Questions for Assignment Help
Question 1
A newly appointed accountant, Mr Max of Bulla Ltd told to his team members that financial
statements will be more comparable when our entity will use AASB/IFRS standards to
prepare a set of financial statements consistent with other reporting entities.
Required:
(a) Do you agree with this statement or otherwise? Explain the above statement with four examples (Hint: AASB 116 requires that PPE must be valued at historical cost or fair value).
(b) If Bulla Ltd changes its accounting policies in the current year explain whether such changes need to be disclosed in the financial statement. If so, how?
Question 2
On 1 July 2020, Rina Ltd acquired all the share capital of Tina Ltd for $944,000. At that date, Tina Ltd’s equity consisted of: Share capital $300,000, General Reserve $192,000 and Retained earnings $112,000.
At 1 July 2020, all the identifiable assets and liabilities of Tina Ltd were recorded at fair value. Both companies employ the perpetual inventory system.
Financial information for Rina and Tina Ltd for the year ended 30 June 2021 is presented below:
Additional information:
(a) On 1 January 2021, Tina Ltd sold inventory costing $60,000 to Rina Ltd for $100,000. Half of this inventory was still on hand with Rina Ltd at 30 June 2021.
(b) On 31 March 2021, Rina Ltd sold equipment to Tina Ltd for $12,000 which was $2,000 below its carrying amount to Rina Ltd at that date. Tina Ltd charged deprecation at the rate of 10% p.a. on this time.
(c) In the 2021 period, Rina Ltd sold a block of land to Tina Ltd at $40,000 above cost. The land is still held by Tina Ltd.
(d) There was a profit in the beginning inventory of Rina Ltd of $12,000 on goods acquired from Tina Ltd in the previous period.
(e) The tax is 30 per cent.
Required:
(a) Calculate goodwill on the date of acquisition;
(b) Prepare journal entries for consolidation worksheet;
(c) Using excel spreadsheet prepare consolidation worksheet for Rina Ltd for the year ended 30 June 2021.
(d) Using excel spreadsheet prepare consolidated financial statements for the year ended 30 June 2021.
Solution
Answer to question 1
(a) Agreement with the statement
The above statement suggested by the newly appointed accountant regarding the applicability of financial standards such as IFRS and AASB holds true. The primary purpose of the accounting standard is to provide common accounting policies and regulations to be managed and followed by the organisation to prepare the financial statements. The management is only responsible for selecting accounting policy; however, it should be Limited with the appropriate accounting standards (Commenced, 2018). For a better understanding of the applicability of various accounting standards, the following examples can be considered:
(b) Disclosure of the changes
As per AASB 8, the accounting policies and the principles can only be changed by the management if there are reliable indications that it will improve the overall financial reporting of the organization, change in statute, or change in relevant accounting standards. According to paragraph 5 of AASB 8, the company will be required to present the current accounting policies followed by the management and any changes in the accounting policies made in the current financial year. According to pa para 5 of the said accounting standard, retrospective change because of the change in accounting policy will also be included, and it will be required to present in detail (Aasb.gov.au. 2022).
Answer to Question 2:
(a) Goodwill
(b) Consolidation of journal Entries
(c) Consolidation worksheet
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(d) Consolidated financial statement
Reference:
Aasb.gov.au. 2022. [online] Available at: <https://aasb.gov.au/pronouncements/accounting-standards/> [Accessed 27 April 2022]. https://aasb.gov.au/pronouncements/accounting-standards
Aasb.gov.au. 2022. [online] Available at: <https://www.aasb.gov.au/admin/file/content105/c9/AASB108_08-15.pdf> [Accessed 27 April 2022]. https://www.aasb.gov.au/admin/file/content105/c9/AASB108_08-15.pdf
Commenced, D., 2018. 2.5 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES. Policy. https://www.coomalie.nt.gov.au/images/Documents/All/2.5%20Statement%20of%20Significant%20Accounting%20Policies%202017.pdf
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