Salad Ltd acquired all the net assets of an existing business

Question Salad Ltd acquired all the net assets of an existing business, Lettuce Ltd on 1 July 2020. The statements of financial position of the two companies immediately prior to the acquisition were as follows:       Salad Ltd Lettuce Ltd Cash   $4,200 $2,000 Accounts receivable   30,000 16,500 Freehold land   265,000 100,000 Building (net)   35,000 28,000 Cultivation equipment (net)   69,000 46,000 Irrigation equipment   18,000 21,000 Delivery trucks   46,000 36,000 Motor vehicles   30,000 32,000     497,200 281,500 Accounts payable   29,000 24,500 Loan – Bank of NSW   155,000 79,000 Loan – Bernard Bros   35,000 34,000 Loan – Golds Corp.   72,000 52,500 Share capital               110,000 shares 110,000 –                …

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Green Energy Company and Build-Smart Construction

Question 1: Green Energy Company has recently completed a $220,000, two-year study on its latest project, ‘Roof-top Solar”. It estimated that 28,000 units of its new Roof-top Solar units could be sold annually over the next 10 years at a price of $6,580 each. Subcontractors would install the unit at a cost of $4,700 per installation. Fixed costs of $11 million per annum will be incurred. The initial outlay includes $52 million to build production facilities and $4.2 million in land. The $52 million facility will be depreciated using the prime cost method over the project’s life (fully depreciated at the end of the project). At the conclusion of the project the facilities (including the land) will be sold for an…

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FREE – Business Combination – Acquistion

With examples and reference to relevant Australian Accounting Standards, explain the key steps in the acquisition method. Why is it important to identify an acquirer in a business combination?

Flashy Ltd is involved in the manufacture of Ugg boots

Topic 2 – Business Combinations Flashy Ltd is involved in the manufacture of Ugg boots. The director wishes to sell the business to a long-standing competitor, Boots Ltd. The financial statements of Flashy Ltd at 1 July 2019 contained the following information: Assets Liabilities Current assets Liabilities Cash 7,500 Accounts payable 18,900 Accounts receivable 11,000 Other payables 41,000 Inventories 16,500 Provisions 27,000 Total current assets 35,000 Loans 63,000 Total liabilities 149,900 Non-current assets Equity Vehicles 32,000 Share capital: 50,000 shares 48,000 Accumulated depreciation -5,500 Retained earnings 47,800 Trucks 37,000 Total equity 95,800 Accumulated depreciation -6,300 Machinery 22,000 Accumulated depreciation -3,000 Buildings 49,000 Accumulated depreciation -4,500 Land 90,000 Total non-current assets 210,700 Total assets 245,700 Total liabilities  and equity 245,700   An agreement was…

The management team at Piper Ltd

Question The management team at Piper Ltd is evaluating a proposal to overhaul its production methods company wide. Important details concerning this proposal is provided below: The initial cost of the equipment will be $25 million. This cost will be depreciated using the straight-line method over the 10-year life of the upgrade. Staff will need to be retrained to use the new equipment. This is expected to cost $500,000. Existing equipment will need to be removed and disposed of at a cost of $750,000. The new equipment will also enable the firm to offer the leading eye test accuracy and detail on the market. Collectively, this is expected to increase the firm’s revenues by $3 million in year 1. This will…

HA2032 – Corporate and Financial Accounting

Question 1 The following data relates to ABC Ltd: Profit for the year ended 30 June 20X1, $500,000. On 31 March 20X1, the directors decided to pay an interim cash dividend of $100,000. On 7 April 20X1, the interim dividend was paid. For final dividends, the company’s constitution provides that the directors can recommend a dividend to be subsequently declared by a resolution of the members in a general meeting. The directors recommended a final dividend of $250,000 to be paid. The shareholders accepted the final dividend at the annual general meeting, and payment was made on 14 September 20X1. Required: Prepare journal entries to record the above dividend payments. Prepare the retained profits general ledger account.   Question 2 Adelaide…

ACCT603 Management Accounting – Christchurch Packaging and Just Jeans

Question 1 Christchurch Packaging Corporation uses a job-order costing system with a plantwide overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:     Machine-hours required to support estimated production 154,000   Fixed manufacturing overhead cost $659,000   Variable manufacturing overhead cost per machine-hour $4.50   Required (show your calculations):   a. Compute the predetermined overhead rate. b. During the year, Job 546 was started and completed. The following information was available with respect to this job:     Direct materials requisitioned $370   Direct labour cost $250   Machine-hours used 34   Compute the total manufacturing cost assigned to Job 546.   c. During the year, the company worked a total of 145,700 machine-hours on all jobs and…

ACCG8121 Excel S1 2020 – Bikes 2000 Ltd produce two high end bicycle

Scenario Bikes 2000 Ltd produce two high end bicycle products. They need you to create a spreadsheet that can conduct a multi-product Cost Volume Profit Analysis.  You can assume that all products made are sold and that sales price, fixed costs, and the sales mix stay constant. You will need to calculate the labour costs, material costs, fixed costs and variable costs and then work out the break even volume using a weighted contribution margin.  You have also been asked to show a forecast for different unit volumes for a selected product line and produce a break even analysis line chart.  Download the full instructions and a mark breakdown from iLearn.   Start by downloading the assessment workbook from iLearn and…

ACT502 Management Accounting – Paramel Beverages bottles and John Smith

Question 1 Paramel Beverages bottles two soft drinks under licence to Cadaver Ltd. at its Newcastle plant. Bottling at this plant is highly repetitive, automated process. Empty bottles are removed from their carton, placed on a conveyor, and cleaned, rinsed, dried, filled, capped and heated (to reduce condensation). The only stock held is direct materials or else finished goods. There is no work in process. The two soft drinks bottled by Paramel Beverages are lemonade and diet lemonade. The syrup for both soft drinks is purchase from Cadaver Ltd. Syrup for the regular brand contains a higher sugar content than the syrup for the diet brand. Paramel Beverages uses a lot size of 1,000 cases as the unit of analysis in…

ACST2001 Financial Modelling – Yolanda

Question 1 Yolanda bought a 180-day $100000 bank bill 74 days ago for $98300.00.She sold it to George today and received $99000.00. Draw a cash flow diagram that captures the details of Yolanda’s transactions. Calculate the purchase yield (simple interest rate) and sale yield (simple interest rate) of this bill (as a percentage, rounded to 2 decimal places). Without any further calculations, explain how the selling price will change if George accepts a lower yield. Calculate capital gain or capital loss component of Yolanda’s investment (in dollars and cents, to the nearest cent). Assuming Yolanda borrowed to purchase the bond, what is the break-even rate of interest of borrowing (simple interest, as a percentage, rounded to 2 decimal places)? If the…

ACT202 Management Accounting – John Smith and Warsaw Ltd

Q1 John Smith, a college student, plans to sell CD players over the internet & by mail order during the semester to help pay his expenses. He buys the players for $29 & sells them for $50. If payment by cheque accompanies the mail order (estimated to be 40% of sales), he gives 10% discount. If customers include a credit card number for either internet or mail order (estimated 30% of sales), they receive 5% discount. The remaining collections are estimated as follows: One month following 15% Two months following 8% Three months following 5% Uncollectable 2%   Sales forecast are as follows: September 150 units October 250 units November 350 units December 450 units January Business terminated   John plans…

HA2011 – 2020 – Management Accounting

Question 1 Refer to the following information listed below: Direct material used $150,000 Selling costs $5,000 Indirect labour $7,000 Administrative costs $10,000 Depreciation on factory equipment $70,000 Direct labour $40,000 Overtime premiums paid $20,000 Indirect materials $45,000   Based on the information provided above, calculate the period costs: $15,000 $20,000 $190,000 $372,000   Question 2 Yang Manufacturing makes a product called Yin. The relevant range of operations is between 2,500 units and 10,000 units of Yin per month. Per unit costs at two activity levels are as follows: 5,000 units at $17.00 per unit; 7,500 units at $13.00 per unit. Determine the cost formula that expresses the behaviour of Yang’s total costs.   Question 3 The following information relates to Wells…