ACCT6005 Company Accounting

ACCT6005 Assessment 2 Brief T1 2020.docx Page 1 of 7

ASSESSMENT BRIEF
Subject Code and Name ACCT6005 Company Accounting
Assessment Assessment 2 Case Study – Intragroup Transactions
Individual/Group Individual
Length Part A Problem Solving: Practical and Discussion
Part B Video Presentation 5 minutes (+/-10%)
Learning Outcomes This assessment addresses the following subject learning
outcomes:
a) Prepare consolidated financial statements and related
accounting entries for incorporated entities
Submission By 11:55pm AEST/AEDT Sunday of Module 5.2 (Week 10)
Weighting 25%
Total Marks 100 Marks

Context:

The assessment will assess the knowledge and skills covered in Module 2 Intragroup
Transactions. It will require students to utilise skills from previous modules as well
understand reasons for, aspects of and adjustments for intragroup transactions.
Students will be required to prepare acquisition analysis, consolidation journal

entries and consolidation worksheet for intragroup transactions, and consolidated
financial statements for the group.
Instructions: Case scenario and requirements are on Page 3.
Part A

Use the supplied templates for journal entries and consolidation worksheet to design
your own correct format for journal entries and consolidation worksheet
Show all workings where required
Combine all answers into one assessment document.

ACCT6005 Assessment 2 Brief T1 2020.docx Page 2 of 7
Part B:
Prepare a video presentation addressing the questions in Part B.

Marks will be awarded for your technical understanding of subject content, as well
as your communication and presentation skills.
The learning rubric on page 6 (next page) details the assessment criteria for the
communication and presentation skills.
Visual aids can be used to support your presentation although it is required that you
present in front of the camera at all times.
Reading from notes should be avoided.
Please introduce yourself and the purpose of your presentation.

Important Note:
Assessments missing Part b) will not be marked since it proves the authenticity of the
student’s work and individual approach to the case study problems as a replacement
for the invigilated Class Test 2.
Submission Instructions:
Part A:

Submit the assessment document in a Word or Pdf format including a cover sheet.
JPEG files or similar cannot be opened and will not be marked.
Submit via the Assessment link in the main navigation menu in ACCT6005 Company
Accounting.

Part B:

Upload your file on Blackboard by reading the instructions contained in the following
link:

https://laureateau.blackboard.com/webapps/blackboard/content/listContentEditable.jsp?content_id=_387629_
1&course_id=_4044_1
ACCT6005 Assessment 2 Brief T1 2020.docx Page 3 of 7
Case Scenario
Alice Ltd acquired all the issued shares of Springs Ltd for $521 760 cash on 1 July 2019. At
this date, the information below was provided:

Springs Ltd’s equity comprised of Share Capital, Retained earnings and General
Reserve with the following account balances:
Share Capital $161 700
Retained Earnings 151 200
General Reserve 72 000

• Springs Ltd had recorded Goodwill of $5 760 (see Goodwill account in Consolidation
Worksheet Template).
• Al the identifiable assets and liabilities of Springs Ltd were recorded at fair value
equal to their carrying amounts except Buildings that were considered to have a
further 5-year useful life.

Carrying amount ($) Fair value ($)
Buildings (Cost $352 800) 175 200 199 200

Other information included:
1) Goodwill: Goodwill relating to the acquisition of Springs Ltd was impaired by $8 640
during the year ended 30 June 2020.
2) Inventories: On 1 April 2020, Springs Ltd sold some inventories to Alice Ltd for $226
800. These inventories had originally cost Springs Ltd $189 000. At 30 June 2020,
50% of these inventories had been sold by Alice Ltd externally. Both companies used
the perpetual method to account for inventory transactions.
3) Plant: On 1 July 2019, Alice Ltd sold an item of plant to Springs Ltd for $126 000. At
this time, the carrying amount of the plant was $96 000. Springs Ltd depreciated the
plant at 20% per annum on cost.
4) Dividends: Dividends of $16 320 were paid in May 2020.
5) The company income tax rate is 30%.
Part A
Problem Solving Practical (40 Marks)
a) Prepare the acquisition analysis at 1 July 2019. Show all workings. (4 marks)
b) Prepare the consolidation worksheet entries at 1 July 2019. Journal narrations
are required. Prepare your journal format based on the template below.
(6 marks)

Date Details Debit ($) Credit ($)

ACCT6005 Assessment 2 Brief T1 2020.docx Page 4 of 7
c) Complete the consolidation worksheet for the group at 30 June 2020. Prepare
your consolidation worksheet using the template provided below.
(24 marks)
d) Prepare Consolidated Statement of Financial Performance for the group at 30
June 2020. (6 marks)
Alice Ltd Group
Consolidation Worksheet at 30 June 2020

Alice
Ltd
Springs
Ltd
Ref Adjustments Ref Group
($)
Dr ($) Cr ($)
Sales revenue 1 843 200 950 400
Cost of sales (1 464 960) (795 840)
Gross profit 378 240 154 560
Proceeds from sale of
Plant
126 000
Dividend revenue 16 320
Interest revenue 5 760
Depreciation – Building
Depreciation – Plant (53 760) (31 200)
Carrying amount of
Plant sold
(100 800)
Impairment loss –
Goodwill
Interest expense (32 640) (12 480)
Profit before tax 333 360 116 640
Income tax expense (72 240) (31 200)
Profit after tax 261 120 85 440
Retained earnings
(1/7/19)
269 760 151 200
Dividend paid (24 960) (16 320)
Dividend declared (50 400)
Retained earnings
(30/6/20)
455 520 220 320
Share capital 288 000 161 700
General reserve 96 000 72 000
BCVR
Shareholders’ equity 839 520 454 020
Liabilities
Accounts payable 220 800 48 960

ACCT6005 Assessment 2 Brief T1 2020.docx Page 5 of 7

Dividend payable 50 400
Long-term loan 782 880 60 960
Deferred tax liabilities 32 640
Total liabilities 1 086 720 109 920
Total Liabilities &
Equity
1 926 240 563 940
Assets
Cash 75 840 36 000
Accounts receivable 25 920 12 480
Inventories 255 360 158 400
Deferred tax assets
Land 400 800 89 700
Plant 306 240 162 240
Acc’d Dep’n – Plant (84 480) (75 840)
Buildings 540 000 352 800
Acc’d Dep’n – Buildings (115 200) (177 600)
Goodwill 5 760
Acc’d Imp losses –
Goodwill
Investment in Springs
Ltd
521 760
Total assets 1 926 240 563 940

Problem Solving Discussion (40 Marks)
Using the case scenario above and your responses to Part (1):
a) In Transaction No. 2 Inventories, assuming Alice Ltd sold the remaining inventory in
the year ended 30 June 2021. Discuss the tax effects of this transaction on the group
for the years ended 30 June 2020 and 30 June 2021. (15 Marks)
b) In Transaction No. 2 Inventories, assuming Alice Ltd sold all the inventories bought
from Springs Ltd on 1 April 2020 by 30 June 2020. Discuss the tax effects of this
transaction on the group for the years ended 30 June 2020 and 30 June 2021.
(5 Marks)
c) In Transaction No. 2 Inventories, assuming Alice Ltd classifies the inventory as a noncurrent asset and depreciates this asset on a straight-line basis for five years. Discuss
the tax effects on the group for the years ended 30 June 2020 and 30 June 2021.
(20 Marks)
ACCT6005 Assessment 2 Brief T1 2020.docx Page 6 of 7
Part B Presentation (20 Marks)
In a video recording, explain verbally the following:
a) The consolidation worksheet entries related to Transaction No.3 Plant in Part A
for each of the years following the intragroup transaction until Plant is fully
depreciated by Springs Ltd. (10 Marks)
b) Differences and similarities between the consolidation worksheet entries required
for an intragroup sale of a non-current asset classified by the buying entity as a noncurrent asset, and classified by the buying entity as inventory. (10 Marks)
ACCT6005 Assessment 2 Brief T1 2020.docx Page 7 of 7
Learning Rubric: Assessment 2 Part B Communication Skills

Assessment Attributes Fail (0-49%)
(Marks 0-9.9)
Pass
(50-64%)
(Marks 10-12.9)
Credit
(65-74%)
(Marks 13-14.9)
Distinction
(75– 84%)
(Marks 15 -16.9
High Distinction
(85-100%)
(Marks 17-20)
Part B Presentation
20 Marks (20%)
Difficulty/failure in explaining
rationale for selected
accounting tools and processes.
Presenter does not appear
rehearsed.
Presenters nonverbal
communication distracts from
the presentation.
Presenter reads directly from
notes.
Language and presented of very
low level.
Not completed.
Evidence of attempts to
communicate clearly the
rationale and application of
selected accounting tools
and processes.
Presenter appears somewhat
rehearsed.
Presenter is frequently reliant
on notes.
Mostly clear and
understandable
presentation
proving a good
understanding of
the relevant
accounting tools
and processes with
minor errors.
Presenter appears
rehearsed and prepared.
Well-groomed and
confident with some
exceptions.
Presenter is not reliant on
notes but uses them.
Clearly presented and
adequately justified,
proving advanced
understanding of the
relevant accounting
tools and processes.
Presenter appears
rehearsed and well
prepared.
Well-groomed and
confident.
Presenter is not reliant
on notes.
Clearly presented and
adequately
substantiated,
indicating an
excellent
understanding and
application of the
relevant accounting
tools and processes.
Presenter appears fully
rehearsed and well
prepared.
Well groomed and
confident.
Presenter is not reliant
on notes and does not
appear to have
memorised the
presentation.

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