So just finish the assignment, and send it to me throughout my email. And i will do the submission, and please send it to me before the summit time 2 hours
ACFI2011 MAJOR ASSIGNMENT SEMESTER 2, 2020 · DUE DATE: Week 10 - Sunday 25 October 2020 11:59 PM · SUBMISSION: Through Turnitin by the due date. · WEIGHTING: 20% of the final mark. PART A (6 Marks) The 2019 Novel Coronavirus infection (‘COVID-19’) outbreak has developed rapidly in 2020. It has brought about devastating consequences for communities across the globe including the interrupted movement of people and goods throughout the world and the governments’ restrictions on individuals and businesses. The resulting impact on financial reporting will be significant. One of the main accounting issues is that entities will be required to perform impairment tests as indicators of impairment will exist for many entities. Determining when the effects of COVID-19 should be reflected in the impairment calculations in accordance with IAS 36 (i.e., AASB136 Impairment of Assets) will depend on: The period end of the financial statements (i.e. the reporting date); and The sector and geography in which the entity operates Let us assume two reporting entities, multinational corporations, Company A and Company B with the reporting date of 31 December 2019 and 29 February 2020, respectively. It takes three months for financial reports to be authorised for issue. To illustrate the timeline: 31 December 2019 30 January 2020 29 February 2020 20 March 2020 2019 financial year-end for Company A WHO’s announcement of coronavirus as a public health emergency. 2019 financial year-end for Company B Australian borders were closed to all non-residents. This government action would affect the entity’s future operations. Required: Advise how the effects of COVID-19 on impairment tests of assets should be reported in the books of: 1) Company A 2) Company B Provide justification for your answer. (Maximum: 500 words in total) Note: You may assume that Company A and Company B operate in any sectors that have been significantly impacted by COVID-19 – e.g. travel, tourism, entertainment, retail, construction, manufacturing, insurance and education. You do not have to assess which type of assets, and how much, will be impaired by the result of COVID-19. PART B NUSPACE Ltd, a retailer for aerospace products, commenced operations on 1 July, 2020 by issuing 150 000 $2.00 shares, payable in full on application. There were no share issue costs. For the year ending 30 June 2021, the company recorded the following aggregate transactions: Accounts $’000 Sales 7 000 Other income 800 Cost of sales 3 800 Administration charges 360 Selling and distribution expenses 800 Employee entitlement expenses – (selling) 380 Wages and salaries – (selling) 350 Wages and salaries – (admin) 200 Doubtful debts expense 20 Depreciation expense - to be calculated Interest expense 300 Other borrowing expense 60 Income tax expense 220 The following additional information was noted during the preparation of financial statements for the year ended 30 June 2021: · Inventory was measured at the lower of cost and net realisable value.(inventory) = · Buildings, plant and equipment were measured at cost. The benefits were expected to be received evenly over the useful life of the asset.(building, plant and equipment) · Financial assets held for trading are equity investments that are held for the purpose of selling and short-term profit taking. (Financial asset held for trading) · Additional 30 000 $2.00 fully paid shares have been issued and fully paid on 1 April 2021. · A cash dividend of $50 000 (27.8 cents per share) was declared and paid during the 2021 financial year and a final dividend for 2021 of $55 000 was proposed but not recognised in the financial statements. · $150 000 of other loans are repayable within 1 year. The remaining amount is payable in full at the end of 2024. (Others loan) · The provision for employee benefits includes $55 000 payable within 1 year. · The warranty provision is in respect of a 12-month warranty given on certain goods sold. · The bank loan is for 10 years and repayable in full at the end of the term. The interest rate is 5% and it is secured over the land. · NUSPACE Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and classifies expenses by function within the statement. · The following assets were purchased on 1 July 2020: Asset Cost ($) Useful life (years) Land 450 000 - Plant and equipment 3 000 000 5 Buildings 7 00 000 10 · Land was revalued upward by $50 000 (assume zero income tax for this transaction). The valuation was conducted by the registered valuer, The Invaluable Pty Ltd. · Summarised account balances are provided below: (prepare balance sheet) Year-end balances, 30 June 2021 $’000 Cash on hand 50 Cash on deposit, at call 700 Trade debtors 7 570 Allowance for doubtful debts 20 Other debtors 850 Inventory 3 300 Financial assets held for trading 500 Land 500 Buildings 700 Plant and equipment 3 000 Patents 590 Amortisation of patent 50 Bank loans 6 000 Other loans 500 Trade creditors 7 700 Provision for employee benefits 300 Warranty provision 1 000 Current tax payable 320 Deferred tax liability 200 · NUSPACE Ltd transferred $100 000 out of retained earnings into general reserve. · Assume plant and equipment facilities are mainly used for selling and distribution activities and buildings are occupied and used by administrative staff. Required: For the year ending 30 June, 2021 (NOTE: comparative financial statements are not required), 1. Using the pro forma table supplied in appendix B, prepare a preliminary trial balance for NUSPACE Ltd; (6 Marks) 2. Prepare a statement of comprehensive income for NUSPACE Ltd in accordance with the requirements of AASB 101. NUSPACE Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and classifies expenses by function within the statement; (6 marks) 3. Prepare a statement of changes in equity for NUSPACE Ltd in accordance with the requirements of AASB 101; (6 marks) 4. Prepare a statement of financial position for NUSPACE Ltd in accordance with AASB 101. Use the current/non-current presentation format; (6 marks) 5. Prepare appropriate notes to the accounts. (You do not need to prepare notes related to income taxes. Include the following note as note 1. You may optionally add accounting policies to this note): (10 marks) “1. Summary of significant accounting policies Basis of accounting The financial report is a general purpose financial report which has been prepared on the historical cost basis, except where stated otherwise. Statement of Compliance The financial statements have been prepared in accordance with the requirements of the Corporations Act, Australian Accounting Standards which include Australian equivalents to International Financial Reporting Standards (AIFRSs) and AASB Interpretations. Compliance with AIFRSs ensures the financial statements and notes comply with International Financial Reporting Standards” APPENDIX A: PRESENTATION REQUIREMENTS (Departures may attract a penalty) 1. The assignment is required to be submitted through Turnitin by the due date; 2. It is worth 20% of the final grade but will be marked out of 40; 3. The assignment will be marked on the basis of a requirement of "suitable for publication", that is, the relevant statements/notes comprise an external report; 4. The assignment must be performed individually; 5. You are to employ an aggregated format whenever appropriate and consistent with provision of minimum line items prescribed in AASB101; 6. The financial statements and the notes are to be typed or word processed in 12 point font; 7. You are not to use specialised accounting software packages, such as are employed by professional accounting firms, to produce your financial reports; 8. You are to apply the ‘function of expense’ or ‘cost of sales’ method to the classification of expenses in the income statement (see AASB101 paras 97-105); 9. You are directed to use the current/non-current format for the statement of financial position (balance sheet) and supply a “net assets” line item; 10. The notes are to be simplified equivalences to published reports; that means a list of constituent components of a given line item with their respective dollar amounts, not footnotes; for Part B there is one set of notes to cover all statements, numbered sequentially from 1 (as supplied); 11. The coversheet must be signed by student with ticked module and Turnitin ID. APPENDIX B NUSPACE Ltd - Trial Balance as at 30 June 2021 DR CR $’000 $’000 Sale of goods Other income Cost of sales Administration charges Selling and distribution expenses Employee entitlement expenses – (selling) Depreciation expense plant and equipment – (selling and distribution) Depreciation expense building – (administration) Wages and salaries – (selling and distribution) Wages and salaries – (administration) Doubtful debts expense Interest expense Other borrowing expense Income tax expense Cash on hand Cash on deposit, at call Trade debtors Allowance for doubtful debts Other debtors Inventory Financial assets held for trading Land Building Accumulated depreciation – buildings Plant and equipment Accumulated depreciation – plant and equipment Patents Amortisation of patent Bank loans Other loans Trade creditors Provision for employee benefits Warranty provision Current tax payable Deferred tax liability Land revaluation reserve Share Capital Dividends paid Retained earnings, transfer to general reserve General reserve Totals APPENDIX C: General Marking Criteria 5 4 3 2 1 Accounting Knowledge Excellent analysis and discussion of accounting concepts and the relevant standard Clear analysis and competent use of accounting concepts accounting concepts and the relevant standard Accurate but limited knowledge regarding accounting concepts and the relevant standard Limited grasp of accounting concepts or the relevant standard Inaccurate understanding of accounting concepts or the relevant standard Critical evaluation Fully developed and supported assertions and analysis Developed and supported assertions and analysis Assertions and analysis exist but are not developed or supported adequately Assertions and analysis exist but are not developed or supported accurately Lack of assertions and analysis, development and/or support Structure /Language Particularly clear with logical transitions throughout Consistent focus and good transition Paragraph flow and transitions are adequate Weak paragraph structure and illogical transitions Lack of focus 2