59547 – Assessment 2Assessment Type: Short report on consolidated

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Assignment Details:
Type: on financial statements and calculations – individual assessment.Purpose: This assessment is designed to allow students to and analyse accounting standards and interpret how they apply to various corporate groups. It enables students to identify and solve problems relating to accounting for consolidated groups. It allows students to communicate the financial affairs of a company to financial report users. This relates to learning outcomes a, b and c.Value: 30% Due Date: Week 10 – Friday 8.00 pm.Submission: Soft copy uploaded to Moodle via KOI’s Moodle subject homepage.Topic: Consolidated worksheet, consolidated financial statementsTask Details: On 1 July 2016, Rock Ltd acquired (ex div.) all of the issued capital of Wallaby Ltd. The recorded equity of Wallaby Ltd at this date consisted of:Share capitalGeneral reserve Retained earnings$1200002500055000At 1 July 2016, all the identifiable assets and liabilities of Wallaby Ltd were recorded at fair value except for the following assets:Carrying amount Fair valueLand $100000 $130 000Inventories 78500 86100Machinery (cost $86 000) 52000 56000Vehicles (cost $58 000) 47000 53 000Additionally, Wallaby Ltd’s records showed a dividend payable at 1 July 2016 of $8000. This dividend was paid on 31 October 2016. The assets of Wallaby Ltd at acquisition date included goodwill recorded at $15 000 arising from a business combination transaction in 2012.At 1 July 2016, Wallaby Ltd owned but had not recorded an internally generated brand name. This brand name was considered by Rock Ltd to have a fair value of $29 000 and an indefinite useful life. An impairment test conducted with respect to the brand name on 30 June 2019 concluded that its recoverable amount at that date was $2000 less than its carrying amount.The vehicles and machinery were expected to have a further useful life of 6 and 8 years respectively, with benefits to be received evenly over those periods. Inventory on hand at 1 July 2016 was all sold by 31 January 2017. The land owned at 1 July 2016 was sold in September 2017 for $150 000. The machinery on hand at 1 July 2016 was sold on 1 January 2019 for $38 000.Adjustments for the differences between carrying amounts and fair values of assets and liabilities on hand at acquisition date are recognised on consolidation. When assets are sold or derecognised, any related valuation reserves are transferred to retained earnings.In June 2018, Wallaby Ltd paid a share dividend worth $20 000 from the general reserve on hand at 1 July 2016.The trial balances of both companies at 30 June 2019 showed the following balances:Rock Ltd Wallaby LtdDebit balancesCash $ 2 500 S 1250Receivables 27 000 13 000Inventories 39 700 24 500Other current assets 15200 8 200Deferred tax assets 7 500 3 500Vehicles 88 000 158 000Equipment — 42 000Land 140 000 180 000Financial assets 68 000 14 800Goodwill 28 000 15000Shares in Wallaby Ltd 250 000 —Debentures in Rock Ltd — 25 000Dividend paid 10000 5000Dividend declared 20000 12000Transfer to general reserve 10000 5000Cost of sales 210000 192 550Income tax expense 30000 32 000Depreciation and other expenses 39000 36 000Carrying amount of machinery sold — 30 500Carrying amount of equipment sold 21 000 —Credit balances $1 005 900 $ 798 300Share capital $ 200 000 $140 000General reserve 35000 10000Retained earnings (1/7/18) 51 300 67 500Accounts payable 69 500 36 000Loan payable (due 30/6/23) 25000 15000Dividend payable 20000 12000Provisions 12 500 9 300Current tax liability 43000 34 000Deferred tax liability 11 800 5000Accumulated depreciation — vehicles 16400 60 000Accumulated depreciation — equipment — 34 5008% Debentures (matures 30/6/22) 25000Sales revenue 450 000 320 000Dividend revenue 17000 —Other income 11 400 17000Proceeds on sale of equipment 18000 —Proceeds on sale of machinery — 38 000$ 1 005 900 $ 798 300Required: Prepare the consolidation worksheet journal entries for the preparation of the consolidated financial statements of Rock Ltd at 30 June 2019.Marking Guide:Interpretation and representation 20%Calculations 50% 10%Assumptions 10%Communication 10%Total mark will be scaled to a mark out of 30 subject marks

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