Week 1 The following data refer to Nani’s Fashions for the current year:   Sales Revenues $475,000 Work in process inventory, 31 December     15,000 Work in process inventory, 1 January     20,000 Selling and administrative expenses     75,000 Income tax expense     45,000 Purchase of raw materials     90,000 Raw materials inventory, 31 December     12,500 Raw material inventory. 1 January     20,000 Direct labour   100,000 Electricity: plant     20,000 Depreciation plant and equipment     30,000 Finished goods inventory, 31 December     25,000 Finished goods inventory, 1 January     10,000 Indirect material       5,000 Indirect labour       7,500 Other manufacturing overhead     40,000   Required: Prepare the schedule of cost of goods manufactured for Nani’s fashion. Prepare the schedule…

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Question 1 Which of the following events listed below results in an accounting transaction for Clothing Ltd?  State a reason if it is not an accounting transaction.   Clothing Ltd signed a contract to hire a new store manager for a salary of $150,000 per annum. The manager will start work next month. The founder of Clothing Ltd., who is also a major shareholder, purchased additional stock in another company. Clothing Ltd borrowed $230,000 from a local bank. Clothing Ltd purchased a sewing machine, which it paid for by signing a note payable. Clothing Ltd issued 10,000 shares to a private investor, who is also a car business owner, in return for a new delivery truck. Two investors in Clothing Ltd…

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Crystal Hotel Pty Ltd is a privately owned 3.5 stars hotel located in Sydney. The Hotel consists of 160 rooms with maximum capacity of 350 guests, a restaurant with capacity of 150 guests, a function room with maximum capacity of 250 guests and a conference room with maximum capacity of 200 guests. The average price per room per night is $150. While the hotel is located in a very popular location, close proximity to a river and in the city centre, it is becoming quite out-dated. The owners rely heavily on their corporate clientele. Clients usually use the hotel for their expat employees. Due to long-term contracts, they pay on credit with invoices being issued at the end of each month.…

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A different version of this question is available here   SECTION A Snap Ltd is a seafood business with headquarters in Apollo Bay. Snap Ltd products include many varieties of seafood but one item lacking in its product range is Tasmanian Atlantic Salmon. The board of Snap Ltd decided to investigate a takeover of a Tasmanian company, Southern Pty Ltd, whose major product is the packaging of Tasmanian Atlantic Salmon. Strategically, Southern Pty Ltd would be a good fit with Snap Ltd as Snap owns two processing factories in Devonport, one of which is under-utilised.  If Southern were acquired, then Snap would liquidate the company and transfer all the processing work to one of the Devonport factories. The financial statements of…

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QUESTION 1: Balance Day Adiustments Anne Chovi is the sole proprietor of Scooba Dive Inc located in a popular beachside location referred to as The Cove. Anne has been successfully operating her environmentally friendly Scuba Diving gear business for the last ten years. The business primarily stocks goggles and facemasks, wetsuits, scuba tanks and other assorted diving gear. Anne also runs diving courses to promote the beauty of the reef and the continued need to look after the marine environment. Anne is so busy with the management of the business and running the diving courses that she was unable to attend to the bookkeeping, so she hired Jones & Co Accounting Specialists Pty Ltd to take over the accounting function. You…

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Question 1: Topic 3 and 4 - Consolidated financial statements, method, acquisition, business combination valuation and intra-group transactions On 1 July 2017, Old Ltd acquired 100% of the share capital of School Ltd (cum div.) for $920,000. School Ltd's balance sheet on acquisition date included: Dividend payable $20,000 Retained earnings 180,000 Share capital 600,000 General reserve 40,000   At acquisition date, all of School Ltd’s net assets were recorded at fair value except for: Carrying amount Fair value Inventory $32,000 $40,000 Land 62,000 75,000 Contingent liability - 8,000 Buildings (Cost $100,000) 69,000 78,000   Additional Information: The dividend payable at acquisition date was subsequently paid in August 2017. The revalued inventory was sold during the year ended 30 June 2018. The…

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The Subsidiary, Smashed On 31 December 2016, Parts Palace Limited acquired 60% of the shares in Smashed Limited. On that date, the equity of Smashed Limited comprised:   $ 000 Share capital 700 Retained earnings 400 Equity $1,100   At acquisition, the book value of the assets and liabilities of Smashed Limited were considered to be at fair value, except for some non-depreciable assets (included under 'Other non-current assets' and considered to be part of net identifiable assets) that had a book value of zero and where Parts Palace assessed their fair value to be $170,000. There has been no change to assessed value of these assets since acquisition. Goodwill impairment At the most recent balance date (31 December 2019), the…

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Question 1: Parker products manufactures a variety of household products.  The company is considering introducing a new detergent.  The company’s CFO has collected the following information about the proposed product. The product has a proposed life of 4 years. You will have to purchase a new machine to produce the detergent. The machine will have an upfront cost of $2 million. The machine would be depreciated on a straight line basis. The company anticipates that the machine will last 4 years and after the 4th year, its salvage value will be equal to $0. The detergent is expected to generate sales revenue of $1 million in the 1st year, $2 million in the 2nd year, $2 million in the 3rd year…

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Question 1 Tea Tree Bay Ltd acquires a Gizmo Machine from Jetsons Ltd for the following consideration:   Cash $20,000 Land In the books of Tea Tree Bay Ltd the land is recorded  at its cost of $100,000. It has a fair value of $140,000. Equipment: In the books of Tea Tree Bay Ltd the equipment is recorded at a cost of $50,000. The equipment has an accumulated depreciation balance of $20,000. The fair value of the equipment is $23,000 Assumption of liability Tea Tree Bay Ltd also agrees to assume the liability of Jetsons Ltd’s bank loan of $30,000 as part of the Gizmo Machine acquisition. Other associated costs Tea Tree Bay Ltd also spend $5,000 as the installation cost.…

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