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…

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…

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…

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…

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…

Spreadsheet Project Task 2 Today is 1 January 2018. Sue just purchased a 10-year 4.5% p.a. Treasury bond with a face value of $100 at the yield rate of j2 = 4.3% p.a. The bond is redeemable at par. The maturity date is 1 January 2028. On receipt of each coupon, Sue deposits the coupon into a bank account earning the reinvestment rate. Sue predicts that there are three potential states for the future economy. (25 marks) State 1. Market yield is j2 = 5.05% p.a. from 2018 to 2023 and j2 = 5.2% p.a. from 2024 to 2027. Reinvestment rate is j2 = 5.15% p.a. from 2018 to 2023 and j2 = 5.3% p.a. from 2024 to 2027. State 2. Market yield is j2 = 4.55%…

Question 1  Inspired Ltd manufactures spurs. Factory overhead is applied to the production of spurs using a predetermined rate based on budgeted direct labour hours. Budgeted cost of production (for 30,000 units) for the year to 30 June 2015 was:   Direct materials $ 225,000 Direct labour (6,000 hours) 75,000 Fixed factory overhead 39,000 Variable factory overhead 30,000   Actual factory overhead incurred in the year to 30 June 2015 was $72,000. Actual direct labour hours were 6,100.     Required: ( a )     Calculate the factory overhead application rate (per direct labour hour) for the year.   ( b )     Calculate the total amount of factory overhead for the year applied to the production of spurs.   (…

Assessment item 3 Assignment 2 Value: 20% Due date: 07-May-2018 Return date: 29-May-2018 Submission method options Alternative submission method Task You are required to complete all three questions below. A total of 50 marks are allocated to these questions, which will be converted to a final mark out of 20%. All workings, when appropriate, must be shown to substantiate your answers.   Question 1 [34 marks]    Topic 3: Consolidation: Non-controlling interests On 1 July 2016, Poppy Ltd acquired 80% of the issued shares of Sunshine Ltd for $240 000 when the equity of Sunshine Ltd consisted of: share capital $160000 general reserve $10000 retained earnings $59000 At this date, all identifiable assets and liabilities of Sunshine Ltd were recorded at fair value except…

Question 1 [20 marks]   Topic 2: Presentation of financial statements    The following balances are extracted from the trial balance of Tammy Ltd for the year ended 30 June 2018:     $ Sales revenue 3,200,000 Interest income 360,000 Rental income 40,000 Interest expense 50,000 Income tax expense 300,000 Administrative salaries 340,000 Depreciation of office equipment 140,000 Bad debt expense 220,000 Cost of sales 1,100,000 Foreign currency translation loss 100,000   Additional information:   During the period, land was revalued upwards by $160,000 (net of tax). • At 1 July 2017, the balances of foreign currency translation reserve and revaluation reserve were $110,000 and $40,000 respectively. • On 15 November 2017, a plant with a carrying amount of $130,000 was…