ACC204 Report On Financial Statements And Calculations Assessment 4 Answer

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Question :

ACC204 CORPORATE ACCOUNTING AND REPORTING T121

Assessment Details

Assessment 4

Assessment Type: Assignment – individual assessment – short report on financial statements and calculations

Purpose: To allow students to demonstrate their ability to relate corporate accounting concepts and applying their understanding of accounting standards AASB 3, AASB 10 and AASB 12. Students will be required to complete complex calculations and journal entries for business combinations, consolidation and other relevant accounting standards covered in the lectures. This assessment relates to learning outcomes a, b, c and d.

Value: 20%.

Consolidation Non-controlling Interest

Task details:

Melissa Ltd purchased all the issued shares of Soren Ltd for $.on 1 July 2020 when the equity of Soren Ltd was as follows;

Share capital$......
………………….$......
………………….$......

At this date, Soren Ltd had not recorded any goodwill, and all identifiable assets and liabilities were recorded at fair value except for the following assets.

AccountCostCarrying AmountFair valueFurther life (Years)
Inventories
……………….………………
……………….
……………….……………..
…………………………………….………..……………………………..
Contingent Liability………………………………………………………………
Unrecorded Asset……………………………………..………………..
Unrecorded Asset…………………………………………


…..% of inventory were sold by 30 June 2021.Differences between carrying amounts and fair values are recognised in the consolidation worksheet.

Required:

  1. Prepare the acquisition analysis at acquisition date.
  2. Prepare adjusting journal entries for the consolidation worksheet at acquisition date.
  3. Prepare adjusting journal entries for the consolidation worksheet on 30 June 2021.

If Melissa Ltd purchased just ……% of the issued shares of Soren Ltd on 1 July 2020, considering the tax rate of 30%, partial goodwill method is under use and the NCI at acquisition date is measured based on the proportionate share of the identifiable assets and liabilities in Soren Ltd.

Required:

  1. Prepare the acquisition analysis at acquisition date.
  2. Prepare the business combination valuation entries and the pre-acquisition entry at acquisition date.
  3. Prepare the journal entry to recognise NCI at acquisition date.
  4. Prepare the consolidation worksheet entries at 30 June 2021. Assume a profit for Soren Ltd for the year ended 30 June 2021 of $.and no other changes in Soren Ltd’s equity since the acquisition date.
  5. Explain in details;
    1. Why is it necessary to make consolidated worksheet adjustments?
    2. How often is it necessary to make consolidated worksheet adjustments?
    3. Where should consolidated worksheet adjustments be posted?
  6. List and explain the accounting standards issues relevant to the consolidation process both for full control and NCI.
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