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BAP32 – Corporate Accounting
Trimester 2, 20 21
Due Date: Submit online through MyGCA by 5 PM , Tuesday , Week 10. ...
BAP32 – Corporate Accounting
Trimester 2, 20 21
Due Date: Submit online through MyGCA by 5 PM , Tuesday , Week 10.
Length: 1200 words including calculations
Referencing : Harvard Referencing
Plagiarism: Due to numeric calculations up to 40% similarity will be considered. More than 40%
similarity will be penalised. More than 80% similarity will be awarded zero.
File format: A Microsoft Word file should be submitted through Moodle submission link. No PDF
or Microsoft Excel file will be accepted.
Group: No more than 3 members in a group. Please organise yourselves into groups. After
the formation of the group, you must inform your lecturer by email.
From : Member 1StudentID @studentmail.gca.edu.au
To : [email protected]
CC : Member 2StudentID @studentmail.gca.edu.au
Member 3StudentID @studentmail.gca.edu.au
Subject : Group formation of BAP32 Group Assignment
Information provided in the email :
Name of Member 1, Mobile number used for assignment communication purpose)
Name of Member 2, Mobile number (used for assignment communication purpose)
Name of Member 3, Mobile number (used for assignment communication purpose)
Research Essay ( 5%)
You will be required to investigate 2 (two) ASX listed companies corporate reporting on Fa ir Value.
You are required to download the financial reports of any two selected companies and identify the
required information from the notes on fair value disclosures. You need to compare as to how two
companies’ fair value disclosures are made. You must email your lecturer to receive the softcopy of
the annual reports.
In your answer , you need to identify and report on comparative fair value hierarchies and methods
used for differing classes of assets by the selected two companies.
Hints: https://www.aasb.gov.au/admin/file/content105/c9/AASB13_08 -15.pdf
1With Harvard Style Referencing you must provide reference within the document. The page
numbers of the respective documents should be given using “Insert footnote” option in Microsoft
Words. 2Please follow t he example below:
1 Page 243 – ANZ Annual Report 2019 2 Page 289 – Woolworths Annual Report 2019
Case 1: Accounting by the acquirer (5%)
The trial balance of Packman Ltd at 1 January 2019 was as follows:
At this date, all the assets and liabilities of Packman Ltd are sold to Zaba Ltd, with Packman Ltd going
into voluntary liquidation. The terms of acquisition are:
(a) Zaba Ltd is to take over all the assets of Packman Ltd, as well as the accounts payable of
(b) Costs of liquidation of $700 are to be paid by Packman Ltd with funds supplied by Zaba Ltd.
(c) Preference shares in Packman Ltd are to receive two fully paid shares in Zaba Ltd for every three
shares held, or alternatively, $0.80 per share in cash payable at the acquisition date.
(d) Ordinary shareholders of Packman Ltd are to receive two fully paid ordinary shares in Zaba Ltd
for every share held or, alternatively, $2.50 in cash payable half at the acquisition date and half
in one year’s time.
(e) Debentu re holders of Packman Ltd are to be paid in cash out of funds provided by Zaba Ltd. The
debentures have a fair value of $102 per $100 debenture.
(f) All shares issued by Zaba Ltd have a fair value of $1.20 per share.
(g) Costs of issuing and registering the shares issued by Zaba Ltd amount to $80 for the preference
shares and $200 for the ordinary shares.
(h) Legal and accounting costs associated with the acquisition of Packman Ltd amount to $2000.
The two parties agree on the terms of the arrangement, and holders of 6 000 preference shares and
10 000 ordinary shares elect to receive cash.
Zaba Ltd assesses the fair values of the identifiable assets and liabilities of Packman Ltd to be as
Zaba Ltd has an incremen tal borrowing rate of 10%.
Preference - 15 000 fully paid shares 15000
Ordinary - 70 000 fully paid shares 70000
Retained earnings 43000
Accumulated depreciation - equipment 20000
Accounts receivable 33000
Accounts payable 16000
172000 172000 Equipment 72000
Accounts receivable 29000
Accounts payable 16000
(a) Prepare the acquisition analysis in relation to the above acquisition by Zaba Ltd.
(b) Prepare the journal entries in the records of Zaba Ltd at the date of acquisition.
(c) Prepare the journal entry for the payment of the deferred consideration in one year’s time.
Case 2: Calculation of deferred tax, and adjustment entry (5%)
The following information was extracted from the records of Jackson Ltd as at 30 June 2020.
The depreciation rates for accounting and taxation are 15% p.a. and 25% p.a. respectively. Deposits
are taxable when received, and warranty costs are deductible when paid. An allowance for doubtful
debts of $25 000 has been raised against accounts receivable for accounting purposes, but such debts
are deductib le only when written off as uncollectable.
1. Calculate the temporary differences for Jackson Ltd as at 30 June 2020. Justify your
classification of each difference as either a deductible temporary difference or a taxable
2. Prepare a deferred tax worksheet and the journal entry to record deferred tax for the year
ended 30 June 2020 assuming no deferred items had been raised in prior years.
Case 3: Consolidation worksheet, previously held investment in subsidiary (5%)
On 1 August 2018, Eco Ltd acquired 10% of the shares in Fico Ltd for $8000. Eco Ltd used the fair
value method to measure this investment with movements in fair value being recognised in profit or
loss. At 1 July 2017, the fair value of this investment was $15 400. The original investment in Fico Ltd
was due to the fact that Fico Ltd was undertaking research into particular microbiological elements
that could influence the profitability of Eco Ltd. With the continuing success of this research, Eco Ltd
decided to acquire the remaining shares ( cum div. ) in Fico Ltd.
On 1 July 2017, Eco Ltd made an offer to buy the remaining shares in Fico Ltd for $151 000 cash. This
offer was accepted by the shareholders of Fico Ltd. On 1 July 2017, immediately after the business
combination, the statement of financial position of Fico Ltd was as follows:
On analysing the financial statements of Fico Ltd, Eco Ltd determined that all the assets and
liabilities recorded by Fico Ltd were shown at amounts equal to their fair values except for:
The plant and equipment is expected to have a further 4 -year life and is depreciated on a straight -
line basis. The inventory was all sold by 30 June 2018.
Fico Ltd had expensed all the outlays on research and development. Eco Ltd placed a fa ir value of
$12 000 on this asset. Fico Ltd also had reported a contingent liability at 30 June 2017 in relation to
claims by customers for damaged goods. Eco Ltd placed a fair value of $3000 on these claims. The
research and development is amortised evenl y over a 10 -year period. The claims by customers were
settled in May 2018 for $2800.
The company tax rate is 30%.
(a) Prepare the consolidated financial statements of Eco Ltd at 1 July 2017, immediately
after the business combination.
(b) Prepare the consolidation worksheet entries at 30 June 2018.
Peer review :
Each member must fill the peer review form separately and hand in to the lecturer. Appendix A.
Appendix A – Peer Review form
Group Name :
Name & Student ID of the member who submitted the research assignment on behalf of the group
in MyGCA (If by mistake more than one submission s are done, you will be penalised for the
Consider the contribution of yourself and each of your group members. What tasks did each group
member do for the research assignment, and what proportion of the total effort do you think each
group member contributed?
Student ID &
Tasks Proportion of
Consider the contribution of yourself and each of your group members. What mark would you give
each person out of 10? You must explain why.
Student ID &
Explain in detail WHY the person deserves this mark.
Please note that NO ONE is perfect (i.e. worth 10 marks)
Your Name :
Time & Date :
Your signature :
Enter the password to open this PDF file:
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