Group Assignment-BBAC401 Term 4 2016 - Question

Group Assignment-BBAC401 Term 4 2016 - Question - Corporate...

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Corporate Accounting (BBAC401) Assignment (Group of Two) (Total Marks 30) Due Date: Session 5.2 Problem # 1 (15 Marks) The trial balance of Simpsons Ltd at 30 June 2018 was as follows: Debit Credit Share capital (ordinary shares issued at $2, fully paid) General reserve Retained earnings (1/7/17) Revaluation surplus Mortgage loan Bank overdraft (at call) 7% debentures Interest payable Accounts payable Dividend payable Current tax liability Provision for employee benefits Deferred tax liability Allowance for doubtful debts Accumulated depreciation – plant and equipment Accumulated impairment – goodwill Cash Accounts receivable Inventory Prepaid insurance $ 750 87 000 131 550 10 500 $ 300 000 37 500 155 100 127 500 375 000 103 800 120 000 4 200 104 250 15 000 78 150 51 300 27 600 19 200 63 750 15 000 Plant and equipment Land Buildings 333 750 330 000 570 000 7bef65cdab02fa66f00e470f7c4e2b713384f852.docx Page 1
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Goodwill Deferred tax asset Sales revenue Cost of sales Administrative expenses Other expenses Interest revenue Dividends revenue Income tax expense Dividends paid Dividends declared 157 500 14 700 675 000 397 500 15 000 75 600 30 000 15 000 1 237 500 3 750 5 250 $2 843 850 $2 843 850 7bef65cdab02fa66f00e470f7c4e2b713384f852.docx Page 2
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Additional information (a) Administrative expenses for the year include interest expense of $43 050. (b) All assets are carried at cost, except for land and buildings which are carried at valuation. (c) During the year, 75 000 shares were issued at an issue price of $2 each, payable in full on application. (d)On 30 June 2018, the directors revalued land and buildings. The revaluation was based on an independent valuation received from FJ Holden, Registered Valuer. The valuation was based on fair values. The carrying amounts of land and buildings before the revaluation were $292 500 and $525 000 respectively. (e) The mortgage loan is repayable in annual instalments of $75 000 due on 1 March each year. (f) The 7% debentures are to be redeemed on 31 March 2019. There is no plan to refinance these debentures in the future. (g) The provision for employee benefits consists of: Annual leave Long-service leave $27 000 24 300 (h) No employee is eligible for long-service leave until 2022. (i) The company tax rate is 30%. Required A. Prepare a statement of profit or loss and other comprehensive income for Simpsons Ltd for the year ended 30 June 2018, according to the requirements of AASB 101 (classify expenses by function). B. Prepare a statement of financial position for Simpsons Ltd as at 30 June 2018 to comply with AASB 101. C. Prepare a statement of changes in equity for Simpsons Ltd for the year ended 30 June 2018, according to the requirements of AASB 101.
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