ACC705 | CORPORATE ACCOUNTING ASSIGNMENT | ACCOUNTS

Question 1 (20 marks)

Consolidation of a wholly owned subsidiary, pre-acquisition equity and BCVR entries for assets and liabilities

Lisa Ltd acquired all the issued shares of Kam Ltd on 1 January 2016 for $88 000. At this date the equity of Kam Ltd consisted of:

                                    Share capital                            $         100 000

                                    General reserve                                    50 000

                                    Retained earnings                                  10 000

All the identifiable assets and liabilities of Kam Ltd were recorded at amounts equal to their fair values except for:

                                                     Carrying amount                     Fair value

Fixtures & Fittings (cost $70 000)          $50 000                                  $60 000

Inventory                                             10 000                                  20 000

Of the inventory on hand at 1 January 2016, 90% was sold by 30 June 2016. The remainder was all sold on 30 June 2017. The Fixtures & Fittings was considered to have a further 2-year life with benefits to be received equally in each of those years.  There were no records in the books for a provision of legal claim worth 15,000 and patents of 90,000. These were reflected at fair value. The tax rate is 30%.

Required

Prepare the consolidated worksheet entries for the consolidated financial statements prepared by Lisa Ltd at 30 June 2016.

Show acquisition analysis calculation, BCVR entries and Pre-acquisition entries for 30.6.16

               

                                                             

Required

You need to prepare a profit or loss statement and other inclusive income for Samoa Ltd, for the year ended 30 June 2017, and notes to the accounts in compliance with AASB 101. Please categorize expenses by function.

Students face several problems in completing ACC705 Corporate Accounting Assignment such as:

1. Deficiency of time
2. Preparing the statement of profit and loss
3. Calculating various costs

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