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SURNA
AME OF CA
ANDIDATE
E:
FIRST NA
AME OF CA
ANDIDATE
E:
ST
TUDENT ID
D:
SI GNATURE
E:
OFFIICIAL US
SE ONLY
Y
Mark
M
SCHO
OOL OF
F ACCO
OUNTIN
NG
ACCT 2542
2
COR
RPORATE
E FINANC
CIAL
REP
PORTING
G AND AN
NALYSIS
S
Sesssion 2, 20115
Final Examinattion
Time Allowed:
A
Readin
ng Time:
Number of Quesstions:
Length
h of exam paper
Final assessmen
a
nt
Q1
/ 15
Q2
/ 10
Q3
/ 15
Q4
/ 20
Q5
/ 10
Q6
/ 10
Q7
/ 10
Q8
/ 10
Total
/ 100
2 Hours
H
10 minutes
8
16 pages
55%
%
Answer AL
LL question
ns.
The questiions are NO
OT of equal value.
Questions 1 to 7 all answers muust be writteen in ink an
nd recorded in this exam
m
paper.
Question 8 - all answ
wers must bbe recorded on the Gen
neralised A
Answer Sheet in
pencil. En
nsure you record yourr student ID
D and full name on thhe Generallised
Answer Sh
heet
UNSW appproved elecctronic calcuulators may
y be used.
This paperr is NOT to be retainedd by the can
ndidate.
DO NO
OT OPEN THIS
T
PAP
PER UNTIL
L INSTRUC
CTED BY THE EXA
AM
SUPERVIISOR
2
THIS PAGE HAS BE
T
EEN INTEN
NTIONALL
LY LEFT BLLANK.
YOU CAN
C
USE THIS
T
PAGE
E FOR WO
ORKINGS BUT THIS
S PAGE WILL
N OT BE MA
ARKED.
3
THIS PAGE HAS BE
T
EEN INTEN
NTIONALL
LY LEFT BLLANK.
YOU CAN
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USE THIS
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PAGE
E FOR WO
ORKINGS BUT THIS
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NOT BE MA
ARKED
(b)
80 000
5 000
15 000
10 000
8 000
25 000
2 000
91 000
Debit
Credit
27 300
27 300
5
An extract of the companys statement of financial position at 30 June 2015
shows:
Assets
Plant at cost
Accumulated depreciation
100,000
(15,000)
Liabilities
Provision for annual leave
Interest payable
(c)
85 000
5 000
10 000
(1)
Asset/Liability
(2)
Carrying
Amount
(3)
Deductible
Amount
(4)
Tax
Base
(5)
Taxable
TempDiff
Plant
85 000
75 000
75 000
10 000
Provn AL
5 000
5 000
5 000
Interest Pay
10 000
10 000
10 000
Total TD
10 000
DTL 30%
3 000
(6)
Deductible
TempDiff
15 000
DTA 30%
(d)
4 500
Debit
Credit
4 500
3 000
1 500
Lear
Regan
Adjustments
Dr
Group
Cr
Cash
14 000
2000
16 000
Inventories
16 000
4000
20 000
Shares in Regan
5000
Total Assets
5000
35 000
6000
36 000
5 000
1000
6000
Share capital
10 000
5000
Retained profits
20 000
20 000
Total Liabilities
and Equity
35 000
6000
36 000
Trade Payables
5000
10 000
Share capital
Shares in Regan
Debit
Credit
5 000
5 000
$ 200 000
172 000
All identifiable assets and liabilities of Romeo Ltd were recorded at fair value
except for the following:
Book value
Fair value
Plant (cost $120 000)
$50 000
$90 000
The plant is expected to have a further 4 year life. The tax rate is 30%.
(a)
Consideration
500 000
Share Capital
Retained earnings
BVINA
200 000
172 000
372 000
28 000
(b)
FVINA
400 000
Goodwill
100 000
Prepare the fair value entry for the plant at 1 July 2014 (3 marks)
Account name
Accumulated Depreciation
Plant
Plant
Deferred tax liability
BCVR
Debit
Credit
70 000
70 000
40 000
12 000
28 000
8
(c)
Goodwill
Debit
100 000
BCVR
(d)
Share capital
Retained profits
BCVR
Investment in Romeo
Debit
Credit
200 000
172 000
128 000
500 000
Depreciation expense
Accumulated depreciation
Deferred tax liability
Income tax expense
(f)
100 000
(e)
Credit
Debit
Credit
10 000
10 000
3000
3000
$80 000
Hamlet Ltd pays Gertrude Ltd an annual service fee of $35 000 at the
end of June each year. (2 marks)
Account name
Service revenue
Service expense
(b)
Credit
35 000
35 000
Dividend revenue
Dividend paid
(c)
Debit
Debit
Credit
15 000
15 000
Loan payable
Loan receivable
Debit
Credit
200 000
200 000
10
(d)
Retained earnings
Deferred tax asset
Land
(e)
Credit
70 000
30 000
100 000
Retained earnings
Income tax expense
COGS
(f)
Debit
Debit
Credit
8 400
3 600
12 000
Hamlet Ltd sold inventory to Gertrude Ltd for $70 000 during the year
to 30 June 2015. The original cost of the inventory to Hamlet Ltd was
$50 000. On 30 June 2015, Gertrude Ltd still has all of this inventory
still on hand. (3 marks)
Account name
Debit
Sales revenue
COGS
Inventory
70 000
6 000
Credit
50 000
20 000
6 000
11
(g)
Debit
Gain on sale
Plant
Accumulated depreciation
40 000
12 000
Accumulated depreciation
Depreciation expense
20 000
6 000
(h)
Credit
20 000
20 000
12 000
20 000
6 000
Assume Gertrude only owns 80% of the ordinary shares of Hamlet Ltd.
Would this affect the required journal entries in (a) to (g) above. Briefly
discuss. (1 mark)
The only entry that would change is (b) the intercompany dividend
12
$U.S. 1 = $A 1.00
$U.S. 1 = $A1.20
$U.S. 1 = $A1.40
$U.S. 1 = $A2.00
$U.S. 1 = $A1.50
Beginning of year
Equipment bought
Cash received
End of year
Average for year
Rate
$A
20 000
2.00
40 000
Trade receivables
4 000
2.00
8 000
Equipment
8 000
2.00
16 000
Cash
Total assets
32 000
Accounts payable
5 000
Retained profits
12 000
Share capital
15 000
64 000
2.00
18 000
1.00
FCTR
15 000
21 000
(b)
10 000
32 000
64 000
Translate the statement of profit or loss of Hilary Inc. for 30 June 2015
into $A using the current rate method. (3 marks)
$U.S.
Rate
$A
20 000
1.50
30 000
Employee expenses
6 000
1.50
9 000
Depreciation
2 000
1.50
3 000
Sales
12 000
18 000
13
$ 200 000
60 000
30 June 2014
$ 100 000
20 000
Debit
Investment in Othello
Share of profit of associate
40 000
Cash
12 000
40 000
12 000
Investment in Othello
(b)
Credit
Debit
Investment in Othello
Retained earnings
16 000
Investment in Othello
Share of profit of associate
40 000
Dividend revenue
Investment in Othello
(20% x $30 000)
12 000
Credit
16 000
40 000
12 000
14
$ 10 000
40 000
36 000
6 000
(b)
Prepare the journal entries of Viola Ltd to account for its interest in the
joint operation in the financial statements for 30 June 2015 (8 marks)
Account name
Debit
Land in JO
Cash in JO
Cash
20 000
20 000
Exploration asset in JO
Accounts payable in JO
Cash in JO
18 000
Credit
40 000
3 000
15 000
15
$50 000
$40 000
$30 000
$25 000
$15 000
16
6. An investor controls an investee when it has:
Exposure to or rights
to variable returns
X
X
A)
B)
C)
D)
E)
A)
B)
C)
D)
E)
Statement of
Financial
Position
Statement of Profit
or Loss and Other
Comprehensive
Income
Statement of
Changes in
Equity
Statement of
Cash Flows
X
X
X
X
X
X
X
X
X
X
X
X
X
X