Corporate Accounting
Mandora Cement Pty Ltd owns 90% of Wagait Sand Supplies Pty Ltd and the accountant William Cox is having difficulty understanding the adjustments that are required for the non-controlling interest. He is particularly confused over the need to adjust for intragroup transfers and cannot understand the treatment when it comes to plant and machinery, inventory and a charge from Mandora Cement for management services.
Required:
Write a business report to William Cox setting out the reason for the adjustments, explaining the treatment of the different transfers and any difference between them.
(14 marks)
The report should take the format of a formal business report, written by your firm with yourself as lead author. Marks will be awarded for presentation style and an appropriate business format.
(16 marks)
Microsoft Word - ACT305_assign_S220Qs Asia Pacific College of Business and Law ACT305 Corporate Accounting Assignment Semester 2, 2020 Page 1 of 3 UNIT CODE: ACT305 UNIT NAME: CORPORATE ACCOUNTING Assignment Information Semester 2 2020 Assessment 20% Submission Requirements. This assignment is to be submitted before 23.59pm Friday 9th October in Week 11 Assignments are to be submitted by one of the following means; DO NOT LODGE BY FAX nor EMAIL nor at LECTURER'S OFFICE KEEP A COPY The assignment must be lodged on or before the due date indicated in the assignment details. Only word docs and/or Excel converted to pdf will be acceptable. Handwritten answers will be rejected. The assignment must conform to the requirements set out in this assignment The assignment must be lodged online via the ACT305 Learnline Assignment Lodgement link on the ACT305 Learnline site. Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs. Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected. DO NOT LODGE VIA EMAIL or FAX - assignments lodged by email or fax will not be accepted. KEEP A COPY - Ensure you have a copy of the assignment lodged. If you have submitted assessment work electronically, please make sure you have a backup copy. Assignment lodgements will be acknowledged automatically on the Learnline site, on submission. DO NOT submit an assignment front sheet. Resubmission As a general rule resubmission of assessment items is NOT possible, however the Lecturer may ask for resubmission if it is deemed appropriate. Details for such resubmission will be made available by the Lecturer if and when the situation occurs. University Plagiarism policy Plagiarism is the unacknowledged use of material written or produced by others or a rework of your own material. All sources of information and ideas used in assignments must be referenced. This applies whether the information is from a book, journal article, the internet, or a previous essay you wrote or the assignment of a friend. Plagiarism policy is available at Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/doclibrary/pro-092.pdf EXTENSIONS AND LATE LODGEMENTS LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE BUSINESS ADMINISTRATOR. Exceptions will only be made where assignments are late due to special circumstances that are supported by documentary evidence, and may be subject to a penalty of 5% of assignment marks per day. Partially completed assignments will be accepted with appropriate loss of marks for the incomplete portion. Asia Pacific College of Business and Law ACT305 Corporate Accounting Assignment Semester 2, 2020 Page 2 of 3 Should students foresee potential difficulties with submission of assessment items, they should contact the lecturer immediately the difficulties come to notice, to discuss suitable arrangements etc. for the submission of those assessment times. An Application for Assignment Extension or Special Consideration should be completed and provided to
[email protected]. This application form, explanation and instructions is available on the ACT305 CDU Learnline course site or direct from http://learnline.cdu.edu.au/units/lb_school_templates/deployed/assignment_extension.docx Please note that it is now College policy that all extension requests must be approved by the Business Administrator. The lecturer is no longer able to personally approve extension requests. Leaving a request for an extension, special assessment or special consideration until the last moment, based on grounds that students could have reasonably been able to foresee, may result in the application being rejected. ASSIGNMENT INFORMATION This Assignment is worth 20% of the total assessment for this unit. This assignment will be marked out of 90, and scaled down to being out of 20. The assignment has 3 questions, each of 30 marks. Q1. A compulsory winding up in insolvency order was issued by the court in respect of Rock Bottom Ltd. The company had a capital of 65 000 fully paid ordinary shares of $1 each. The liquidator took possession of the company’s assets which raised $873 145 on sale. Included in the sale proceeds was $221 000 from the disposal of the land and buildings. The creditors submitted their claims and the following debts were admitted as proven: Liquidation expenses $3 900 Liquidator’s remuneration 10 400 Mortgage loan secured on land and buildings 130 000 Additional mortgage loan on land and buildings 104 000 Employees’ wages 5 employees for 2 weeks at $520 per week 5 200 Secretary’s salary — 3 weeks at $314 per week 942 Employees’ holiday pay 6 500 Sales commission 650 Managing director’s salary — 4 weeks at $780 per week 3 120 Directors’ fees 3 900 Trade creditors 104 000 Unsecured loan stock 130 000 Debentures (secured by circulating security interest) 390 000 PAYG tax instalment 1 014 Fringe benefits tax 2 600 GST 2 586 Required Show the order of priority of payment of debts for Rock Bottom Ltd and calculate the amount payable to the company’s ordinary unsecured creditors. (total 30 marks) Q2. a) With relation to associate companies what do you understand to be significant influence and how would you identify it? Include in your answer illustrative examples. (10 marks) b) How are inter-entity transactions dealt with when accounting for associate companies? Give examples. (7 marks) c) How would an investor account for losses made by an associate company? (13 marks) (total 30 marks) Asia Pacific College of Business and Law ACT305 Corporate Accounting Assignment Semester 2, 2020 Page 3 of 3 Q3 Mandora Cement Pty Ltd owns 90% of Wagait Sand Supplies Pty Ltd and the accountant William Cox is having difficulty understanding the adjustments that are required for the non-controlling interest. He is particularly confused over the need to adjust for intragroup transfers and cannot understand the treatment when it comes to plant and machinery, inventory and a charge from Mandora Cement for management services. Required Write a business report to William Cox setting out the reason for the adjustments, explaining the treatment of the different transfers and any difference between them. (14 marks) The report should take the format of a formal business report, written by your firm with yourself as lead author. Marks will be awarded for presentation style and an appropriate business format. (16 marks) (total 30 marks)