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ACT305 Corporate Accounting

tag 0 Download 1 Pages / 137 Words tag 18-02-2021
  • Course Code: ACT305
  • University: Charles Darwin University
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  • Country: Australia

Question:

            The following information has been extracted from the financial statements of Blake Ltd and its subsidiary Seven Ltd at 30 June 2019.

 

Reconciliation of opening and closing retained earnings

Blake Ltd ($)

Seven Ltd ($)

Sales revenue

593,400

498,800

Cost of goods sold

(399,040)

(204,680)

Gross profit

194,360

294,120

Dividends revenue from Seven Ltd

63,984

---

Management fee revenue

22,790

---

Profit on sale of plant

30,100

---

Expenses

 

 

Administrative expenses

(26,488)

(33,282)

Depreciation

(21,070)

(48,848)

Management fee expense

---

(22,790)

Other expenses

(86,946)

(66,220)

Profit before tax

176,730

122,980

Tax expense

(52,890)

(36,292)

Profit for the year

123,840

86,688

Retained earnings-30 June 2018

274,684

205,712

 

398,524

292,400

Dividends paid

(118,164)

(79,980)

Retained earnings-30 June 2019

280,360

212,420

Statements of financial position

 

 

Shareholders' equity

 

 

Retained earnings

280,360

212,420

Share capital

301,000

172,000

Current liabilities

 

 

Accounts payable

47,042

39,818

Tax payable

35,518

21,500

Non-current liabilities

 

 

Loans

149,210

99,760

 

813,130

545,498

Current assets

 

 

Accounts receivable

51,084

53,578

Inventory

79,120

24,940

Non-current assets

Land and buildings

 

192,640

 

280,360

Plant -at cost

257,871

305,988

Accumulated depreciation

(73,745)

(119,368)

Investment in Seven Ltd

306,160

813,130

        

--

545,498

Other information

  1. Blake Ltd acquired its 80 per cent interest in Seven Ltd on 1 July At that date the capital and reserves of Seven Ltd were:

Share capital

$172,000

Retained earnings

$146,200

 

$318,200

At the date of acquisition all assets were considered to be fairly valued.

  1. The management of Blake Ltd use the partial goodwill
  2. During the year Blake Ltd made total sales to Seven Ltd of $55,900, while Seven Ltd sold

$44,720 in inventory to Blake Ltd.

  1. The opening inventory in Blake Ltd as at 1 July 2018 included inventory acquired from Seven Ltd for $36,120 that cost Seven Ltd $30,100 to
  2. The closing inventory in Blake Ltd includes inventory acquired from Seven Ltd at a cost of

$28,896. This cost Seven Ltd $24,080 to produce.

  1. The closing inventory of Seven Ltd includes inventory acquired from Blake Ltd at a cost of

$10,320. This cost Blake Ltd $8,256 to produce.

  1. The management of Blake Ltd believe that goodwill acquired was impaired by $2,580 in the year to 30th June 2019. The balance on the accumulated impairments of goodwill account brought forward was $19,350.
  2. On 1 July 2018 Blake Ltd sold an item of plant to Seven Ltd for $99,760 when its carrying value in Blake Ltd's accounts was $69,660 (cost $116,100, accumulated depreciation

$46,440). This plant is assessed as having a remaining useful life of six years.

  1. Seven Ltd paid $22,790 in management fees to Blake
  2. The tax rate is 30 per 

Prepare the consolidation worksheet JOURNAL ENTRIES for the preparation of consolidated financial statements by Blake Ltd at 30 June 2019.

NOTE a consolidation worksheet is NOT required.

Your answer should include an acquisition analysis with a calculation of goodwill, pre- acquisition entries, dividend adjustments, intragroup sales and transfers, and a calculation of the non-controlling interest.

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My Assignment Help. Corporate Accounting [Internet]. My Assignment Help. 2021 [cited 16 August 2022]. Available from: https://myassignmenthelp.com/free-samples/act305-corporate-accounting/years.html.


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