Solved Assignments

Bolan Ltd – Accounting for associates, liquidation

Question 1 On 1 July 2017, Bolan Ltd purchased 40% of the shares of Rex Ltd for $151 680 and signed a joint venture agreement with the two other shareholders in Rex Ltd. At that date, equity of Rex Ltd consisted of: Share capital                                   $300 000 Retained earnings                               26 400   At 1 July 2017, the identifiable assets and liabilities of Rex Ltd were recorded at amounts equal to their fair values.   Information about income and changes in equity for both companies for the year ended 30 June 2020 was as shown. Bolan Ltd Rex Ltd Profit before tax Income tax expense Profit Retained earnings (1/7/19)   Dividend paid Dividend declared   Retained earnings (30/6/20) $ 62…

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Newsurf Ltd – Preparation of Financial Statements

Newsurf Ltd, has been manufacturing and selling surfboards for the last two years. Newsurf Ltd commenced operations on 1 July, 2017 by issuing 500 000 $3.50 shares, payable in full on application. There were no share issue costs.   For the year ending 30 June 2019, the company recorded the following aggregate transactions:   Accounts $ Sales 5 385 000 Interest income 11 000 Cost of Sales 3 409 000 Gain on sale of plant 25 000 Employee benefit expenses – Admin 136 000 Depreciation expense- Admin 54 000 Selling & Distribution Expenses 932 000 Insurance expense – Admin 60 000 Doubtful debts expense 5 000 Interest expense 38 000 Other borrowing expenses 4 000 Income tax expense 268 000  …

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Today is 1 January 2019. Lucy is planning to purchase

*It has been assumed that interest is payable Annually and given interest rates are p.a. compounded annually. Today is 1 January 2019. Lucy is planning to purchase a 10-year 4.15% p.a. Treasury bond with a face value of $100. The maturity date of the treasury bond is 1 January 2029 The bond is redeemable at par. Use Goal Seek to find Lucy’s yield to maturity (express your answer as a j2), if the purchase price is $96.5. Use Goal Seek to find Lucy’s net yield to maturity, that is after tax rate, (express your answer as a j2), if the purchase price is $95.5. Given that Lucy needs to pay 30% tax on coupon payment (interest payment) only. Use Goal Seek…

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Sunnybank Ltd acquired all issued share capital of Sunnybank Hills Ltd

Sunnybank Ltd acquired all issued share capital of Sunnybank Hills Ltd on 1 July 2019 for a cash payment of $700,000. The share capital and reserves of Sunnybank Hills Ltd at the date of acquisition were:   Share capital               $300,000 Retained earnings       $200,000 Revaluation surplus   $36,000   All assets of Sunnybank Hills Ltd were fairly valued at the date of acquisition, except for an equipment that had a fair value $20,000 greater than its carrying amount. The cost of the equipment was $75,000 and it had accumulated depreciation of $25,000. At the date of acquisition, it was expected that the equipment had a remaining useful life of eight years. There were no transactions between Sunnybank Ltd and Sunnybank Hills…

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FlixCity & Gaming – Below is the post-closing trial balance which summarised the account numbers

FlixCity & Gaming Post-closing Trial Balance for the month ended 30 June 2016 Account No’s Account Names Opening Balances Dr Cr ASSETS 100 Cash at Bank             10,763.20 110 Accounts Receivable               4,385.27 130 Prepaid Advertising               1,000.00 140 Prepaid Insurance                  798.59 150 Land           717,580.00 160 Buidling           125,000.00 165 Accumulated Depreciation – Building             15,625.00 170 Equipment – Computer/console/candy bar/projector           250,000.00 175 Accumulated Depreciation – Equipment           125,000.00 LIABILITIES 200 Accounts Payable               9,586.38 210 Unearned revenue               3,700.00 220 Interest Payable               3,200.00 230 Loan Payable – Principal due May 2030           906,800.00 240 Wages Payable               2,550.00 250 Utilities Payable               1,650.00 EQUITY 300 Nicholas Robbins, Capital             41,415.68 301 Nicholas Robbins, Drawings 0.00 REVENUE…

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Sunshine Ltd acquired all the issued shares of Rainbow Ltd

Assignement Question Sunshine Ltd acquired all the issued shares of Rainbow Ltd on 1 July 2018 for $350 000. At this date Rainbow Ltd recorded a dividend payable of $12 000 and equity of:   Share capital                                            $ 35 000 Retained earnings                                       52 000 Asset revaluation surplus                            10 000   All the identifiable assets and liabilities of Rainbow Ltd were recorded at amounts equal to their fair values at acquisition date except for:   Carrying amount                       Fair value Inventory                                        $ 15 000                            …

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Sheep Drench department and Cattle drench

Question 1: Budget You are now preparing the budget for the Sheep Drench department for the months of April and May. Sheep Drench manufacturing costs have been budgeted as follows:     Direct materials  $          3.0 per unit Direct labour  $          1.5 per unit Factory overhead Variable  $        0.25 per unit Fixed  $      5,000 per month (Includes $1000 depreciation)   Selling and administrative expenses, including depreciation of $400 per month, are all fixed and total $2500 per month. Other information is as follows: There is an opening inventory of direct materials of $22,500 purchased in February. The selling price of the product has been set at $26 per…

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‘Little Red Riding’ began business on 1 June 2019

Question 1 Retail operations and retail inventory ‘Little Red Riding’ began business on 1 June 2019.  The business is a partnership, between Mr Wheeler and Mrs Wheeler.  The business will sell children’s bicycles at the local markets.  The business is not registered for GST.  The following transactions occurred during June 2019: Date: Details: 1-Jun Mr and Mrs Wheeler deposited $30,000 into the business bank account. 2-Jun Purchase of bicycles (100 small bicycles, and 100 large bicycles) from Red Bikes Rock Ltd on account for $10,000 ($50 per bicycle) on terms of 2/10, n/30. 4-Jun Little Red Riding received an invoice from Fast Freight Ltd relating to delivery costs for the bicycles purchased on 2 June.  The amount due is $300, and…

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On 1 July 2019 Alma Ltd acquired 92% the issued shares of Davis Ltd

On 1 July 2019 Alma Ltd acquired 94% the issued shares of Davis Ltd for $3716000 . The equity of Davis Ltd at this date consisted of: Share capital 1301000 Asset revaluation surpluss 557000 Retained earnings 446000 All the identifiable assets and liabilities of Davis Ltd were recorded at amounts equal to their fair values at acquisition date except for the following; Account Cost Carrying Amount Fair value Further life- in Year Inventories $557,000 $1,003,000 Land $1,115,000 $2,007,000 Machinery $1,562,000 $1,301,000 $2,342,000 8 Fittings $20,000 $20,000 8 Liabilities $50,000 $50,000 All inventories on hand at 1 July 2019 are sold by 30 June 2020. Further life of the assets are listed on the above table. Alma Ltd uses the partial goodwill…

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ACC00146 MANAGEMENT ACCOUNTING – Sunny Days manufactures swimwear and beach accessories for men and women

Sunny Days manufactures swimwear and beach accessories for men and women.  They operate out of rented premises in Currumbin Creek Road where the factory is split into a manufacturing and storage area and a retail space. The business produces 4 products: One-piece swimsuits for women Board shorts for men Beach Towels Beach Umbrellas You, as the management accountant for the firm, have been asked to prepare a range of budgets for the 2020 year.  The following information has been gathered: Sales One-piece swimsuits Board short Towel Beach Umbrellas January 2020 1,800 1,600 400 200 February 2020 1,400 1,100 300 180 March 2020 1,300 1,160 260 160 April 2020 1,000 1,000 140 120 May 2020 400 600 80 60 June 2020 400…

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Newcastle Machining produces parts for the steel industry

Newcastle Machining produces parts for the steel industry. It has 3 categories of overhead costs: machine operating costs, engineering and inspecting costs. The costs expected for these categories for the coming year are as follows: Machining $440,000 Engineering 220,000 Inspecting 180,000 Total 840,000 The plant currently uses machine hours to apply overhead. Expected capacity is 100,000 machine hours. Tom, the plant manager, has been asked to submit a bid on a potential job. He provides you with the following data for this job:   Direct materials $8,000 Direct labour $12,000 Overhead $? Number of inspections 1 Number of machine hours 2,000 Engineering hours 10   Tom has been told that other firms will be competing for this job as well. Most…

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Voltus Communications, a manufacturer of communications equipment

Voltus Communications, a manufacturer of communications equipment, uses a job costing system. Manufacturing overhead is applied based on machine hours and it uses a predetermined overhead rate with budgeted overhead of $3,600,000 for the year and 80,000 machine hours. Voltus uses a financial year of 1 July 2018 to 30 June 2019 and all the activities for the year have been carried out. Summarised details for period 1 July 2018 to 31 May 2019 and for June 2019 follow. Jobs B12- 008,K12-009 and K12-011 were completed during June 2019 .All completed jobs except K12-009 have been sold by 30 June 2019. Jobs in process at 31 May 2019 Job numbers Balance at 31 May 2019 B12-008 $263,000 K12-009 163,000 K12-011 0…

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