Accountancy Class Test Questions

This examination paper must(prenominal) be returned. Candidates atomic number 18 not permitted to remove this paper from the examination room. scholar NUMBER STUDENTS NAME.. .. .. First name Last name speck MACQUARIE UNIVERSITY Semester 2, 2010 IN-CLASS TEST NO 2 Unit ACCG308 CORPORATE ACCOUNTING AND coverage Time allowed Total number of questions Instructions 45 minutes hotshot This is a closed book examination. You are not permitted to access both books, notes or other written materials. Silent calculators, nonprogrammable are allowed. motilitys must be answered on the examination paper. Answer all parts of all questions. (Office engagement Only Do Not Write Here) Total /25 Question 1 (25 marks) On the 1 July 20X6 Howard Ltd gained control of Carter Ltd by buying 70% of its shares for $70,000. At this date, Carter had share capital $50,000 and retained meshing $30,000. Additional schooling ? Goodwill impairment is $ euchre in year ended 20X8 and $850 in 20X9. ? ? Divide nds are paid out of current period kale. The dividends were paid originally year-end. strain purchases by Howard from Carter during the current year amounted to $30,000.Their cost to Carter was $20,000. Howard still holds $18,000 of this history at year-end. Loan from Carter attracts 12% interest per annum. The interest was paid in the first place year-end. Included in other assets of Howard is equipment purchased from Carter on the 1 July 20X7 for $41,000. The equipment was four historic period old when sold, had cost Carter $50,000 to buy, with expected residual value $5,000, and had been depreciated 10% p. a. straight-line. Howard depreciates the equipment (after deducting the aforesaid(prenominal) residual) straight-line over the remaining six-year life. ? ? Required Complete the consolidation worksheet on the adjacent page.Note 1. Marks are awarded for each correct individual worksheet entry. 2. For the eliminations column only, entries that are placed in a location wh ere there should not be any entry may attract a penalty mark. 2 Workings Elimination 1 Substitution. Deletes 70% of subsidiarys pre-control equity. Capital 50 000 * 0. 7 = 35 000 maintained lolly 30 000 * 0. 7 = 21 000 investing in subsidiary 70 000 Goodwill 14 000 Recognise goodwill impairment (prior and current years) Dr Goodwill impairment expense 850 Dr maintained profits cholecalciferol Cr Accumulated Goodwill impairment 1 350 Deletes intra-group dividend tax and appropriation. 5 000 * 0. 7 = 10 500 Dr Dividend revenue 10 500 Cr Dividend 10 500 Deletes intra-group sales. Dr gross sales Cr Cost of sales Elimination 2 Elimination 3 Elimination 4 30 000 30 000 Elimination 5 Deletes profit on intra-group sale from take stock valuation (Current year). (18 000/30 000) * (30 000-10 000) Dr Cost of sales 6 000 Cr Inventory 6 000 Deletes intra-group loan Dr Loan from Carter Cr Loan to Howard Elimination 6 50 000 50 000 Elimination 7Deletes interest from intra-group loan Dr com e to revenue 6 000 Cr Interest expense 6 000 Deletes profit on intra-group sale of equipment and reinstates equipment carrying amount at sale date Dr Retained profits 9 000 Dr Equipment 9 000 Cr Accumulated depreciation 18 000 Add back inflated depreciation (2 years) of equipment arising from intragroup sale of equipment 6 000 4 500 = 1 500 p. a. Dr Accumulated depreciation 3 000 Cr Depreciation expense 1 500 Cr Retained profits 1 500 Elimination 8 Elimination 9 3 NCI calculations Net profit 0. 3 * (18 000 6 000) = 3 600 6 000 = subtract profit on intra-group sale of inventoryRetained profits 0. 3 * (38 000 9 000) = 8 700 9 000 = subtract profit on intra-group sale of equipment Dividend 0. 3 * 15 000 = 4 500 Capital 0. 3 * 50 000 = 15 000 Parent interest = Group interest NCI 4 Combined consolidation worksheet as at 30 June 20X9 Howard Carter Sum Eliminations Dr Cr 30 000 4 6 000 5/4 Group Allocation to NCI Parent Sales COGS Gross profit some other revenues Other expenses 94 0 00 57 000 ______ 37 000 17 000 22 000 ______ 32 000 26 600 ______ 58 600 27 000 31 600 90 000 121 600 50 000 12 000 30 000 ______ 213 600 45 000 70 000 98 600 ______ 213 600 2 000 176 000 36 000 93 000 ______ ______ 46 000 83 000 6 000 23 000 34 000 ______ 18 000 38 000 56 000 ______ 50 000 64 600 146 000 30 000 69 000 77 000 10 500 6 000 850 3 7 2 7 9 1 2 8 9 3 6 500 6 000 1 500 49 350 34 150 Net profit Opening retained profits 3 600 30 550 21 000 500 9 000 Profit available less Dividends Retained profits Capital Owners equity Loan from Carter Other liabilities Accum depreciation Accum goodwill impairment Total equities + liabilities ______ ______ 56 000 114 600 15 000 42 000 41 000 72 600 50 000 140 000 91 000 212 600 25 000 28 000 50 000 37 000 58 000 5 000 1 1 500 35 600 69 750 10 500 31 500 38 250 105 000 143 250 37 000 18 000 73 000 1 350 1 350 254 600 8 700 26 900 12 300 57 450 4 500 27 000 7 800 30 450 15 000 90 000 22 800 120 450 50 000 6 8 9 2 3 000 ______ ______ revenue 000 357 600 26 000 50 000 71 000 70 000 50 000 Inventory Investment in Sub Loan to Howard Consolidation goodwill Other assets 5 1 6 1 8 6 000 65 000 70 000 50 000 14 000 175 600 ______ ______ 194 850 254 600 Total assets 14 000 68 000 166 600 9 000 ______ ______ ______ 144 000 357 600 194 850 5