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2.Identify the procedures you would carry out to determine if Ulysses Polytropos was a going concern.
End of Semester 2, 2019 Marking Guide_ACCT3000 Mock Final Exam Paper Page 11 of 15 Feasibility of such plans needs to be analysed by examining the effect on cash flows and other relevant forecasts. Obtain details of any post year-end financial reports and sales reports to establish how the business has performed since the year end. Review the bank letter to establish current borrowing facilities and the extent to which they have been drawn down. Consider the availability of assets within the organisation that could be offered as security for any additional financing. Discuss with management the willingness of owners to make additional capital contributions. Evidence regarding this can also be obtained through reviewing board minutes. END OF PART B
End of Semester 2, 2019 Marking Guide_ACCT3000 Mock Final Exam Paper Page 12 of 15 PART C (30 MARKS) QUESTION Your client is Queenscorp Ltd, a diversified business operating throughout Australia. Year- end was 30 June 2011, the auditor’sreport was signed on 31 July 2011 and the financial statements were mailed to shareholders on 14 August 2011. During your subsequent events review you noted the following independent and material items: 1.Queenscorp has been involved in a legal dispute with a competitor for a number of years. The dispute relates to alleged breaches of copyright by Queenscorp. On 27th July you discovered that Queenscorp had settled legal action out of court on terms more favourable than expected. (6 Marks) 2.On 10th July one of Queenscorp’smajor product lines developed a fault that rendered the product unusable. Queenscorp became aware of the fault on 30 July. Although the fault posed no safety risks to consumers, Queenscorp decided to launch a full product recall on the following day. (6 Marks) 3.Queenscorp has invested significant funds in developing a new type of cholesterol- reducing margarine. On 7th July Queenscorp applied for a patent for the margarine, only to discover that the competitor has lodged a similar application previously. The granting of Queenscorp’sapplication is now in doubt. (6 Marks) 4.Queenscorp’sbank loan is conditional upon certain ratios being maintained at all times. On 20th August you discovered that one of the ratios was breached for a 24- hour period on 18th August. (6 Marks) 5.In early June, one of Queenscorp’slargest debtors informed Queenscorp that it was experiencing serious financial difficulties. On 5 July, Queenscorp was