Australasia Ltd started operating on 1 July 2017 with 12 employees. Three years later all of those employees were still with the company. On 1 July 2019 the company hired 15 more people but by 30 June 2020 only 10 of those employed at the beginning of that year were still employed by Australasia Ltd. All employees are entitled to 13 weeks’ long-service leave after a conditional period of 10 years of employment with Australasia Ltd. At 30 June 2020 Australasia Ltd estimates the following: the aggregate annual salaries of all employees hired on 1 July 2017 is now $600,000 the aggregate annual salaries of all current employees hired on 1 July 2019 is now $400,000 the probability that employees hired…

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ACC322 PQ 17.8                          Translation to presentation currency On 1 July 2017, Westland Limited an Australian company acquired the issued shares of Bull Limited a company incorporated in the United States. The draft statement of profit or loss and other comprehensive income and statement of financial position of Bull Ltd at 30 June 2018 was as follows:   US$ US$ Sales revenues 1,600,000 Cost of sales: Opening inventory 140,000 Purchases 840,000 980,000 Closing inventory 280,000 700,000 Gross profit 900,000 Expenses: Depreciation 90,000 Other 270,000 360,000 Profit before income tax 540,000 Income tax expense 200,000 Profit 340,000 Retained earnings as at 1 July 2017 200,000 540,000 Dividend paid 120,000 Dividend declared 200,000 320,000 Retained earnings as at 30 June 2018 220,000 2018 2017…

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ACC322 PQ 17.8                          Translation to presentation currency On 1 July 2017. Echidna Ltd, an Australian company, acquired the issued shares of Bear Ltd. a company incorporated in the United States. The draft statement of profit or loss and other comprehensive income and statement of financial position of Bear Ltd at 30 June 2018 was as follows:   US$ US$ Sales revenues 1,600,000 Cost of sales: Opening inventory 140,000 Purchases 840,000 980,000 Closing inventory 280,000 700,000 Gross profit 900,000 Expenses: Depreciation 90,000 Other 270,000 360,000 Profit before income tax 540,000 Income tax expense 200,000 Profit 340,000 Retained earnings as at 1 July 2017 200,000 540,000 Dividend paid 120,000 Dividend declared 200,000 320,000 Retained earnings as at 30 June 2018 220,000 2018 2017…

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ACC322 PQ 17.8                          Translation to presentation currency On 1 July 2.017. Melbourne Ltd, an Australian company, acquired the issued shares of Memphis Ltd. a company incorporated in the United States. The draft statement of profit or loss and other comprehensive income and statement of financial position of Memphis Ltd at 30 June 2018 was as follows:   US$ US$ Sales revenues 1,600,000 Cost of sales: Opening inventory 140,000 Purchases 840,000 980,000 Closing inventory 280,000 700,000 Gross profit 900,000 Expenses: Depreciation 90,000 Other 270,000 360,000 Profit before income tax 540,000 Income tax expense 200,000 Profit 340,000 Retained earnings as at 1 July 2017 200,000 540,000 Dividend paid 120,000 Dividend declared 200,000 320,000 Retained earnings as at 30 June 2018 220,000 2018 2017…

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Question 17.1 Translation into functional currency Sydney Ltd is a manufacturer of sheepskin products in Australia. It is a wholly-owned subsidiary of a Hong Kong company, Wan Chai Ltd. The following assets are held by Sydney Ltd at 30 June 2017:   Plant Cost A$ Useful life(years) Acquisition date Exchange rate on acquisition date(A$1 = HK$) Tanner 40 000 5 10/08/2013 5.4 Benches 20 000 8 08/03/2015 5.8 Presses 70 000 7 06/10/2016 6.2   Plant is depreciated on a straight-line basis, with zero residual values. All assets acquired in the first half of a month are allocated a full month’s depreciation.   Inventory: At 1 July 2016, the inventory on hand of $25 000 was acquired during the last month…

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Question 15.6 Statement of profit or loss and other comprehensive income (classify expenses by nature) The accountant at Venus Ltd has asked you to prepare the statement of profit or loss and other comprehensive income for the year ended 30 June 2017 in accordance with AASB 101 (classify expenses by nature). To assist, the following trial balance extract has been provided: Debit Credit Sales revenue 5,725,000 Sales returns and allowances 56,100 Changes in inventories of finished goods and work in progress 390,500 Raw materials used 4,000,000 Salaries and wages expense 675,000 Other employee benefits expenses 125,000 Other expenses 228,700 Interest paid 82,400 Interest received 72,500 Dividends received 23,000 Proceeds from sale of land 185,000 Cost of land sold 300,000 Sundry revenue…

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Lion Ltd is an international company resident in Singapore. It acquired the issued shares of an Australian company, Koala Ltd, on 1 July 2016 for a $700,000.   At 30 June 2017, the following information was available about the two companies.   Lion Ltd Koala Ltd S$ A$ Share capital      560,000      350,000 Retained earnings as at 1/7/16      330,000      170,000 Provisions         45,000         30,000 Payables         14,000         40,000 Sales      620,000      310,000 Dividend revenue           6,400                  - Accumulated depreciation - plant      210,000      160,000   1,785,400   1,060,000 Cash         92,100         30,000 Accounts receivable      145,300      115,000 Inventories      110,000         80,000 Shares in Koala Ltd      336,000                  - Buildings…

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On 1 July 2015, Investor Ltd acquired 25% of the shares of Investee Ltd for $42,500. At this date, all the identifiable assets and liabilities of Investee Ltd were recorded at amounts equal to fair value, and the equity of Investee Ltd consisted of:   Share capital $100,000 General reserve 30,000 Asset revaluation surplus 20,000 Retained earnings 20,000   During The 2015–16 year, Investee Ltd reported a profit of $25,000. As reported in other comprehensive income, the asset revaluation surplus increased by $5,000. Investee Ltd paid a $4,000 dividend and transferred $3,000 to general reserve.   Required:   Prepare the equity accounting journal entries at 1 July 2016 assuming that Investor does not prepare consolidated financial statements.

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Canberra Ltd, an Australian company, acquired all the issued shares of Washington Ltd, a US company, on 1 January 2014. At this date, the net assets of Washington Ltd are shown below.   US$ US$ Property, plant and equipment 155 000 Accumulated depreciation (30 000) 125 000 Cash 10 000 Inventory 20 000 Accounts receivable 10 000 Total assets 165 000 Accounts payable 15 000 Net assets 150 000     The trial balance of Washington Ltd at 31 December 2014 was:   US$ US$ Dr Cr Share capital 100 000 Retained earnings 50 000 Accounts payable 42 000 Sales 90 000 Accumulated depreciation - plant and equipment 45 000 Property, plant and equipment 155 000 Accounts receivable 40 000 Inventory…

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