Solved Assignments

MPA105 – Financial Accounting and Reporting

(37 marks) Question 1: On 1 July 2016, Sisters Ltd acquired all of the issued shares of Brothers Ltd for $950 000.  At the acquisition date the equity of Brothers Ltd consisted of: Share capital $600 000 Reserves   120 000 Retained earnings   150 000 At the date of acquisition this equity reflected the fair values of all the identifiable assets and liabilities of Brothers Ltd. The following transaction occurred between the two entities during the financial year: On 1 July 2016 Brothers Ltd sold a motor vehicle to Sisters Ltd for $900 000. The motor vehicle had cost Brothers Ltd $1 500 000. It had been used for 5 years and had a carrying amount of $800 000 on…

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ACC200: ASSIGNMENT TERM 1 2018 – Sewing Easy Ltd has been in business for two years

Sewing Easy Ltd has been in business for two years manufacturing sewing machines. It currently manufactures two models, the basic and advance. Last year, 2017 they made good profit and they were happy their business is running well. They are about to enter a new phase in their business, selling to an overseas buyer. However, they are a bit confused as to why the buyer is only interested to buy the advance model and not the basic or both. For product costing purposes the business uses the traditional costing system and machine hours to assign indirect cost to the sewing machines as they are fairly new in business and don’t want to spend too much money to implement a more refined…

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FIN700–Financial Management – Trimester 1, 2018 – Version 1

QUESTION 1. [6 + 4 + 6 = 16 Marks.]   a) This is a two period certainty model problem. Assume that Daisy Brown has a sole income from Fantasy Ltd in which she owns 15% of the ordinary share capital. Currently, she has no savings. In February, 2018, Fantasy Ltd reported net profits after tax of $600,000, and announced it expects net profits after tax for the current calendar year, 2018, to be 30% higher than last year’s figure. The company operates with a dividend payout ratio of 75%, which it plans to continue, and will pay the annual dividend for 2017 in late-May, 2018, and the dividend for 2018 in late-May, 2019. In late-May, 2019, Daisy wishes to spend…

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Taxes and Consolidation

Question 1 (30 Marks)   The accounting profit before tax of Jameson Ltd for the year ended 30 June 2018 was $320,000. It included the following revenue and expense items:   Amortisation of development costs $30,000 Employee benefits expense 54,000 Carrying amount of plant sold 36,667 Depreciation expense – plant (15%) 40,000 Doubtful debts expense 12,000 Entertainment expense 14,220 Fines and penalties 7,200 Goodwill impairment 1,000 Insurance expense 24,000 Legal fees 4,200 Proceeds on sale of plant 30,000 Rent revenue 25,000 Royalty revenue (non-assessable) 3,500 Restructuring expenses 25,000   The draft statement of financial position as at 30 June 2018 included the following assets and liabilities: 2018 2017 Assets Cash 42,000 57,000 Accounts receivable 190,000 160,000 Allowance for doubtful debts (26,000)…

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Department Variance Analysis

Task 3: Department Variance Analysis                                                                                                   15 marks This task requires you to identify potential causes for variances in the operational profitability of the hotel’s banquets department. You are given an extract of the department’s financial performance report and also budget information (see blow). The report focuses on the aspects of performance that show the largest deviations from the budget: Sales revenues for banquet meals Costs relating to the one complimentary welcome drink served with each meal Costs relating to the major ingredient of the main course: Wagyu beef Kitchen labour costs* *Note: The majority of preparation time is spent on preparing and cooking the main ingredient, the Wagyu steak. At first glance it appears the sales revenue show…

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Hahndorf Ltd acquired 100% of the shares of Sarina Ltd

Hahndorf Ltd acquired 100% of the shares of Sarina Ltd on 1 July 2015 for $700,000, when the equity of Sarina Ltd consisted of: Share Capital                                  $500,000 General Reserve                                 80,000 Retained Earnings                             30,000 All identifiable assets and liabilities of Sarina Ltd were fairly valued at acquisition except the machinery, which had a fair value of $140,000. The machinery had a further 7-year life with depreciation based on the straight-line method. Selected financial information for both companies at 30 June 2018 is as follows:                                                                                         Hahndorf Ltd       Sarina Ltd Sales revenue                                                                   $1,000,000       $800,000 Cost of sales                                                                           (600,000)     (600,000) Gross profit                                                                               400,000         200,000 Dividend received from Sarina Ltd                                        30,000              – Management fee received                                                       26,500              – Gain on sale of…

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BUACC5936 – FINANCIAL MANAGEMENT Semester 1 2018

Question 1 a). *Your grandfather put some money in an account for you on the day you were born. You are now 18 years old and are allowed to withdraw the money for the first time. The account currently has $3996 in it and pays a 5% interest rate. How much money would be in the account if you left the money there until your 25th birthday? What if you left the money until your 65th birthday? How much money did your grandfather originally put in the account? (1 X 3 = 3 Marks) Question 2 Consider the following alternatives: $100 received in one year; $200 received in five years; $300 received in 10 years. Rank the alternatives from most valuable…

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ACC705 – On 1 July 2015, Tuna Ltd acquired all the issued shares of Brim Ltd.

Individual Assignment ACC705   On 1 July 2015, Tuna Ltd acquired all the issued shares of Brim Ltd. Tuna Ltd paid $30 000 in cash and 20 000 shares in Tuna Ltd valued at $3 per share. At this date, the equity of Brim Ltd consisted of $66 000 share capital and $6000 retained earnings.    At 1 July 2015, all the identifiable assets and liabilities of Brim Ltd were recorded at amounts equal to their fair values except for:     Carrying amount          Fair value Plant (cost $150 000) $120 000 $123 000 Patents 90 000 105 000 Inventory 18 000 22 500   The plant was considered to have a further 5-year life. The patents were sold for $120 000 to an external entity on…

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FIN700 – Financial Management Trimester 1, 2018

QUESTION 1. [6 + 4 + 6 = 16 Marks.]   a) This is a two period certainty model problem. Assume that Daisy Brown has a sole income from Fantasy Ltd in which she owns 15% of the ordinary share capital. Currently, she has no savings. In February, 2018, Fantasy Ltd reported net profits after tax of $600,000, and announced it expects net profits after tax for the current calendar year, 2018, to be 30% higher than last year’s figure. The company operates with a dividend payout ratio of 75%, which it plans to continue, and will pay the annual dividend for 2017 in late-May, 2018, and the dividend for 2018 in late-May, 2019. In late-May, 2019, Daisy wishes to spend…

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ACC5213 Assignment – Costing and Budgeting

QUESTION 2 (33 marks) (Module 5)   Mist Fertilizer Ltd manufactures pre-mixed garden fertilizer for the garden centre retail market. The original ingredients including nitrogen, phosphorous and potassium components are mixed in the Primary Process Department (PPD). The fertilizer mix is then transferred to the Granulating and Blending Department (G&BD) for blending and drying (and where a final ingredient is added 70% through the process) and then the mix is transferred to the Bagging Department (BD) where the product is finished and bagged ready for sale. Conversion costs (labour and overheads) are assumed to be incurred evenly throughout the process.   In the Granulating and Blending Department (G&BD) at the commencement of June 2018, there were 10,800 kgs of mixture in…

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Home Guardian has recently completed

Question 1 (25 marks) Home Guardian has recently completed a $200,000, two-year study on its new pest control device. It can go into production for an initial investment in equipment of $5 million. The equipment will be depreciated straight line over the useful life of 5 years to a value of zero. The fully depreciated equipment is expected to sell for $1,200,000 at the end of its useful life. The project also requires investment in land value of $300,000 which is expected to have a realisable value of $500,000 at the end of the project. Investment of $400,000 in current assets will be recovered at the termination of the project. The marketing department has estimated that 200,000 units of its new…

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Financial statements, analysing business transactions and financial statement analysis

Sunbay Sales is a small sales consultancy business and began operation on 1 January 2017. It is owned and operated by Karin Nilson and employs one other consultant. Karin has asked her accountant, Megan Gordon to complete financial statements and write a business report on the financial health of Sunbay Sales in its first year of operation. Sunbay Sales has the following account balances as at 31 May 2017; Cash at bank $72,900 Accounts payable $17,300 Account receivable $26,150 Loan $15,000 Office equipment $10,700 Capital $100,000 Prepayments $0 Income $40,400 Sales solution software $24,500 Expenses ($38,450)   The following transaction occurred in the last month of the financial year- June 2017.   June Transaction Description 1 Paid $24,000 for a 12 month…

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