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ACCT6003 Financial Accounting Processes Assignment Sample

Learning Outcomes

Apply accounting principles and standards when accounting for non-current assets, revenue and liabilities and recognize the judgements required in a range of diverse business contexts.
Differentiate between shares and debentures and apply appropriate accounting procedures.

Submission - By 11:55pm AEST/AEDT Sunday of week 8
Weighting - 25%
Total Marks - 100 marks
Learning Outcomes

Context:

This assessment will cover the learning objectives from the topics covered in weeks 3, 4, 5 and 6 and applying them to real cases. These include accounting for shares and debentures and accounting for non-current assets, including impairment and asset revaluation.

Part A: This assessment is designed to demonstrate your understanding of the accounting process to account for the above topics.

Please use the supplied templates for assignment help to design your answer in the correct General Journal format and combine all answers into one assessment document covering all tasks. Please follow the submission instructions on Blackboard. Submit the assessment file in a word or PDF format including cover sheet. JPEG files cannot be opened and will not be marked.
Instructions:

Part A:

• Using the templates provided. Design your own General Journal templates.
• Type your answers into the General journal, remembering to leave a blank line after each entry and include a narration and date for every entry.
• Where required, please provide clear workings of your calculations in your answers.
• Do not rewrite the question in your assignment.

Round all amounts to the nearest dollar.

Part A: Written report (40 marks)

Question 1: Impairment of assets (9 Marks)

Flights Ltd has determined that its aviation division is a cash–generating unit (CGU). Information as at 30th June 2020 is as follows:

Additional information:

• Buildings - Accumulated depreciation as at 30 June 2020: $100,000
• Equipment - Accumulated depreciation as at 30 June 2020: $200,000
• Flights Ltd calculated the value in use for the division to be $600,000

Required:

a) Calculate the impairment loss as at 30 June 2020: (2 Marks)
b) Prepare a table as provided below to allocate the above impairment loss: (2 Marks)


c) Prepare a general journal (as per template below) to record the above impairment loss for the year ended 30 June 2020. Include a narration. (5 Marks)

General Journal template:

Question 2: Revaluation of Non-current assets (13 Marks)

The Balance sheet for Saturn Ltd disclosed the following information:
Saturn Ltd

Balance Sheet (extract) 30th June 2019

Additional information:

• The company has adopted fair value for the valuation of non-current assets. This has resulted in the recognition in previous periods of an asset revaluation surplus/reserve for the plant of $120,000.

• The plant has a useful life of 10 years and a zero-residual value.

• On 31st December 2019, it was decided to revalue this amount to its fair value of $400,000.

Required:

a) Record the journal entries (as per template below) as at 31 December 2019, relating to the revaluation of this plant. Include narrations. (7 Marks)
b) Record the closing journal entries (as per the template below) for any gain or loss on revaluation only, as at 30th June 2020. Include narrations. (6 Marks)

Ignore any tax effects.

General Journal template:

 Question 3: Share issue (18 Marks)

Cobra Ltd was incorporated on 1 July 2019 and issued a prospectus inviting applications for 100,000 ordinary shares at an issue price of $10.

The shares are payable as follows:

• $5 payable on application
• $2 payable on allotment
• $3 payable on call to be made 30th September 2019
• Share issue costs were $1,500 and legal costs were $500

The transactions for the period were as follows:

Additional information:

The company’s constitution states that any forfeited shares must be refunded to the shareholders.

Required:

Prepare the general journal entries (as per template below) in the books of Cobra Ltd to record the above transactions. Provide narrations for all your entries.

General Journal template:

Solution

Question 1:

Part A:

The Impairment loss of the cash generating unit is amounting to be $900000 (Hassine and Jilani, 2017)

Part b:

As per the procedure of impairment loss allocation the losses are to be adjusted with each asset based on its proportionate share on the carrying value.

Part c:

Question 2:

Part a:

Workings:

Part b:

Question 3: Journal Entries

The Journal Entries in the books of Cobra is as follows

Journal entries

Reference:

Hassine, N.M. and Jilani, F., 2017. Earnings management behavior with respect to goodwill impairment losses under IAS 36: The French Case. International Journal of Academic Research in Accounting, Finance and Management Sciences, 7(2), pp.177-196.

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