200109 Corporate Accounting Systems

Consolidated Financial Statements with Non-Controlling

Interests
Autumn 2015
INSTRUCTIONS
1. The assignment is to be submitted as an individual attempt. It must be
prepared using an Excel spreadsheet and be entirely your own work from this
semester only i.e. do not use or copy any file, in whole or in part, from any
previous semester or from any other person. Each student must individually
create a new excel file for this assignment and use their student number
as the file name.
2. The assignment cover sheet and marking guide can be found as the last two pages
of this document. Print these pages and complete the appropriate details
on both pages. Use the marking sheet to see what is expected and how your
work will be marked. Significant emphasis is placed on the correctness of the
journal entries so ensure you spend adequate time on these. Marks will be lost for
poor quality presentation, for incorrect work, and for missing work. The penalties
for such deficiencies can be seen on the marking sheet so make sure you review
your work before submission and consider how well have met the expected
standards (performance levels) and make any necessary changes before
submission so you avoid losing marks!
3. Your submission needs to be printed on A4 paper, single-sided, and the pages must
be stapled at the top left hand corner only. Do not bind your assignment, nor put it
in a folder or a plastic sleeve. The first page must be the completed and
signed cover sheet and the last page must be the completed marking
sheet with your student ID and name shown. The marker will use the marking
sheet to calculate your result and provide you with feedback on the standard you
achieved against each of the criteria. Assignments which do not have these
two completed sheets attached may not be accepted.
4. The printed assignment is to be submitted to your tutor during the first
10 minutes of your usual tutorial class in Week 11 beginning 4 th May
2015. Submissions will not be accepted by email. If you cannot attend at your
normal tutorial time you need to either send it along with a fellow classmate or
personally hand it to your tutor before the class in which it is due - you would need
to make arrangements directly with them about organising this. Submissions made
during the tutorial, but after the 10 minute deadline, will be penalised by the
deduction of 1 mark. Assignments not submitted at the registered tutorial class will
be regarded as late. All late submissions will be penalised as per UWS policy a
deduction of 2 marks (being, 10% of the possible mark) for each day, or part day,
late. Where necessary, students will need to contact the unit coordinator about the
process for late submission. In the event that students wish to hand in the
assignment after hours, an after-hours submission box is located outside Building
11 at Campbelltown and outside Building ED at Parramatta. IMPORTANT: For this
method of submission, any late penalties will apply from the time/date that it is
removed from the submission box by staff (usually being the morning of the next
business day), not the time/date that it was put into the box by the student.
5. After handing in the printed copy, the excel file must also be uploaded to
vUWS by 5pm on Friday 8th May 2015 at the latest. Further instructions
on this process will be provided on vUWS closer to the due date. The Excel
file must exactly match the printed version and not be modified after the
Corporate Accounting Systems Assignment

Autumn 2015

Page 1

submitted version was printed. Uploading a file that doesnt match exactly, or
failing to upload the excel file on time, will result in a significant penalty! The file
will be checked against other students submissions for potential plagiarism.
6. Staff will not assist students with their answers, nor review draft answers to confirm
if students are on the right track or not. Any queries about the requirements of
the assignment must be directed to the Unit Coordinator only, not to other teaching
staff. This ensures equal treatment for all students. Keep monitoring for any vUWS
announcements about the assignment in case the Unit Coordinator decides to add
to or clarify the information already given.

Corporate Accounting Systems Assignment

Autumn 2015

Page 2

QUESTION
Using the information below and on the next two pages, prepare the following as at
30th June 2014:
PART A: Consolidation adjustment/elimination journal entries that are required at the
above financial year end date (i.e. for one year only); and
PART B: A detailed calculation of non-controlling interest balance and consolidation
worksheet; and
PART C: Consolidated financial statements and statements of changes in equity for
both the group and the parent.
THE FOLLOWING EVENTS OCCURRED:
During the year ended 30 June 2012:
1. On 20 February 2012 Great Ltd created a group entity when it purchased 75% of
the issued capital of Wall Ltd. On acquisition, Wall Ltds accounts showed: Share
capital $250,000 and Retained earnings $68,000. All assets and liabilities
appearing in Wall Ltds financial statements were fairly valued on that date, except:
One of their blocks of land was recorded at $190,000 when its fair value was
judged by the group to be $180,000. On 30 April 2013 this land was sold to a
buyer outside the group for $180,000 cash.
An item of plant was recorded at a cost of $165,000 and a carrying value of
$52,000. At acquisition it had a remaining life of 6 years and was considered to
have a fair value of $87,000. The plant is still an asset of Wall Ltd at 30 June
2014.
Provision for warranty is not recorded by Wall Ltd as it accounts for such costs
on a cash basis. The group considered that the fair value of this liability on
acquisition was $15,000. (After becoming a part of the group Wall Ltd continued
to use the cash paid approach to accounting for warranty and the group
managers decided it was easier to let them continue to do that.)
During the year ended 30 June 2013:
2. On 3 January 2013 Wall Ltd sold an item of plant to Great Ltd for $72,750 when its
carrying value in Walls books was $69,000 (original cost $110,400 and original
estimated life of 12 years). The plant is still an asset of Great Ltd at 30 June 2014.
3. During the year Great Ltd made sales of inventory to Wall Ltd of $258,200. The
inventory account balance of Wall Ltd at the end of the year included stock of $94,150
acquired from Great Ltd. (These were the only intra-group inventory transactions and
balances for the financial year).
4. Great Ltd declared and paid dividends of $90,000 for the year. Wall Ltd paid $55,000 in
dividends for the year. Wall Ltd charged management fees to Great Ltd of $11,000 for
preparing their payroll each month.
During the year ended 30 June 2014:
5. During the year Great Ltd made sales of inventory to Wall Ltd of $116,000, while
Wall Ltd sold $184,000 of inventory to Great Ltd.
6. Closing inventory account balances on 30 June 2014 included the following: Great
Ltd $54,950 (bought from Wall Ltd) and Wall Ltd $29,575 (bought from Great Ltd).
7. The management of Great Ltd believes that Wall Ltds warranty liability had
increased by a further $5,000 for the 2013/14 financial year after it was
determined to be $18,000 at 30 June 2013.
8. Wall Ltd charged management fees to Great Ltd for preparing their payroll each
month.
9. Dividends were declared/paid by both companies.
10.All journals related to NCI are to be shown as event number 10. Wall Ltd is the groups

Corporate Accounting Systems Assignment

Autumn 2015

Page 3

only subsidiary.

If no journal entry is required at 30 June 2014 for any of the above events
then just show the event number in your journals with the notation No
entry required and move to the next event number.

Corporate Accounting Systems Assignment

Autumn 2015

Page 4

FINAL VERSION
AT 30 JUNE 2014
INCOME STATEMENTS
Sales revenue
Cost of goods sold
Gross profit
Other income
Management fee revenue
Dividend revenue
Gain on sale of asset
Expenses
Depreciation expense
Management fee expense
Other expenses
Profit before tax
Income tax expense
Profit for the year after tax
Retained earnings at start of
year
Dividend paid/declared
Retained earnings at end of
year
BALANCE SHEETS
Equity
Share capital
Retained earnings
Current Liabilities
Accounts payable
Income tax payable
Dividends payable
Non-Current Liabilities
Bank loans
Provision for employee
benefits
Provision for warranty claims
Current Assets
Accounts receivable
Allowance for doubtful debts
Dividends receivable
Inventory
Non-Current Assets
Land and buildings
Plant at cost
Accumulated depreciation
plant
Deferred tax asset
Shares in Sichuan Pty Ltd
Investment in Wall Ltd

Corporate Accounting Systems Assignment

GREAT LTD
$

WALL LTD
$

1,653,400
711,600
941,800

1,061,900
681,200
380,700

75,500
-

12,000
2,450

(153,800)
(12,000)
(556,100)
295,400
(65,970)
229,430

(62,900)
(163,400)
168,850
(50,655)
118,195

114,990

12,590

(125,000)

(100,000)

219,420

30,785

500,000
219,420

250,000
30,785

109,460
65,970
62,500

64,660
70,555
50,000

550,000

620,000

27,100

13,400

80,000
1,614,450

1,099,400

144,400
(14,300)
37,700
102,700

101,100
(9,900)
98,800

775,000
522,200

741,800
302,100

(205,500)

(154,400)

12,000
240,250

19,900
-

Autumn 2015

Page 5

1,614,450

1,099,400

ADDITIONAL INFORMATION:
The company tax rate is currently 30% and it has been this rate for many years.
Great Ltd has the following accounting policies for the group:
(i)
Revaluation adjustments on acquisition are to be made on consolidation only,
not in the books of any subsidiary;
(ii) Non-controlling interests are measured at fair value;
(iii)
Intragroup sales of inventory are at a selling price of cost plus a mark-up
of 40%;
(iv) Plant is depreciated using the straight-line method with no residual value,
calculated on a monthly basis. For part-months, assets acquired or sold in the
first half of any month (deemed to be 1st to 15th day inclusive) will be treated
as if they had been acquired or sold, as applicable, on 1 st day of that same
month. Assets acquired or sold in the second half of any month (16 th day
onwards) will be treated as if they had been acquired or sold, as applicable, on
1st day of the following month; and
(v) All calculated amounts are to be rounded to the nearest whole dollar.
Companies in the group do not show cents in any journals, worksheets, or
financial statements.
NOTE:
You MUST number your journal entries and present them in the order as they relate
to the number given for each event. Where more than one journal is needed for
an event to be completely accounted for add the letters a,b,c,etc to them as
necessary. [For example, if three separate journal entries are required to fully
record the information detailed in point number 1, then the first journal will be 1a
and the second is to be 1b and the third 1c.] Short narrations are expected for each
journal entry. Marks will be lost if journals are not presented in a clear and
professional manner (i.e. poor or unclear presentation can include showing the
debit entry on one page but the credit entry on another, or not clearly
distinguishing between debit and credit entries).
The required statements for both the group and the parent company are: the
statement of comprehensive income, statement of financial position, and
statement of changes in equity. Follow the formats shown in Chapter 29 of the
textbook. Notes to the statements are not required. Marks will be lost if statements
are not presented in a clear and professional manner (i.e. poor or unclear
presentation can include splitting the reports over two pages, so start each
statement on a new page!).
You may cut and paste the financial information on the next page into your excel
file, but no other information is to be copied into your file from anywhere
else.
You are expected to use at least the basic formula functions in Excel when
preparing worksheets and financial statements (i.e. use Excel formulas to add
totals and sub-totals etc, rather than calculating values manually and then just
typing them in to the spreadsheet!).
This is the final unit in the accounting major where you will have to produce
complex journal entries and financial reports at a professional level. Therefore, a
very high standard is expected. Approach it as if you are preparing it for your
employer. The reports cannot be late for the board meeting and the directors
carefully review all of the information you give them. They pay you well, but they
expect quality work. It needs to be technically correct and presented well,
otherwise you will need to look for another job!!!

Corporate Accounting Systems Assignment

Autumn 2015

Page 6

General Hint:
This is not an assignment that you should commence a day or two before it is due!!!
There is a lot of work to do in the time that you have available to complete the
assignment. The assignment question can be complex in places, but these
complexities can be resolved by thoroughly reading the relevant material that has
been covered. You will also need to call on your prior understanding of accounting and
logically consider some of the entries needed as they may not all be shown explicitly
in the textbook.

Assignment Cover Sheet

School of Business
Student name:
Student number:
Unit name and
number:

200109 CORPORATE ACCOUNTING SYSTEMS

Tutorial day and

time:
Tutor:
Title of assignment:

CONSOLIDATION WITH NON-CONTROLLING

INTERESTS

Date due (in Week

10):
Date submitted:
Campus of
enrolment:

CAMPBELLTOWN / PARRAMATTA

(circle one)

Declaration:
I hereby certify that no part of this assignment has been copied from work submitted by me
in a previous semester, or from any other students work, or has been copied from any
other source.
No part of this assignment has been written or produced for me by any other person. It is all
my own, individual work done in this semester.

Corporate Accounting Systems Assignment

Autumn 2015

Page 7

I prepared this assignment using a new Excel file that I created this semester and I hold a
copy of the file if the printed original is lost or damaged. The hard copy submitted exactly
matches the Excel file that I have uploaded, or will upload, to vUWS.
I am aware that this work may be compared to work submitted by students studying this
unit this semester or in previous semesters for the purpose of detecting possible
plagiarism/collusion.
I am aware that this work may be reproduced and submitted to plagiarism detection
software for the purpose of detecting possible plagiarism (which may retain a copy on
its database for future plagiarism checking).

Signature:______________________________________
Note: An examiner or lecturer/tutor has the right to not mark this assignment if the
above declaration has not been signed.
Plagiarism, Cheating & Collusion
Plagiarism, cheating or collusion is regarded as a serious breach of the University's academic standards.
Students must carefully read the Academic Rules on Plagiarism, Cheating & Collusion. Refer to the School
of Accounting Handbook for further details
RULES WILL BE STRICTLY ENFORCED

200109 CORPORATE ACCOUNTING SYSTEMS

CRITERIA & STANDARDS AUTUMN 2015
CRITERIA

A.

UNSATISFACTORY

Presentation,
Numbering and
Narrations of journals

Four+ events not correctly

recorded and/or missing and/or
included incorrectly

MEETS MINIMUM
EXPECTATIONS FOR A PASS

Three events not correctly

recorded and/or missing
and/or included incorrectly

Two events not correctly

recorded and/or missing and/or
included incorrectly

0 marks

3 marks

Three or more journals are not

presented clearly and/or not
complete and/or not numbered
correctly

EXCE
EX

One e
record
and/or i

5 marks

One or two journals not

presented clearly and/or not
complete and/or not numbered
correctly

0 marks

mark

Consolidation Worksheet and Non-Controlling Interest Calculation:

Non-Controlling Interest
Calculation

Consolidation Worksheet

Four+ errors and/or total does

not agree to the Balance Sheet

Three errors but total agrees

to the Balance Sheet

0 marks

Two errors but total agrees to

the Balance Sheet

mark

Poor presentation and/or not

balanced due to errors and/or
missing entries

C.

BELOW EXPECTATIONS

Journal entries:
Correctness and
Completeness
of journals

B.

ASSIGNMENT MARKING

One erro
the

1 marks

Not clearly presented but does

balance.

0 marks

1 mark

Consolidated Financial Statements

Presentation of Comprehensive
Income Statements & Balance
Sheets
(for both Group and Parent)

Statements of Changes in
Equity
(for both Group and Parent)

Deductions: 1. Late, but in class

Poor presentation and/or more

than three errors and/or missing
headings or amounts

Not acceptably presented

and/or three errors and/or
missing headings or amounts

0 marks

mark

One or more errors and/or does

not agree to the Balance Sheet

-1 mk

STUDENT ID:

Corporate Accounting Systems Assignment

1 marks

1 marks

-10% per day or part-day

STUDENT NAME:

Autumn 2015

Accepta
with
missing

Could be presented more clearly

but agrees to the Balance Sheet

0 marks
2. Late printed version or electronic upload

Acceptably presented, but with

two errors and/or missing
headings or amounts

Page 8

3. Electronic ve

[NOTE: Errors flowing from earlier incorrect journals, etc will not be treated as further errors]

Corporate Accounting Systems Assignment

Autumn 2015

Page 9