66587 – Need the full method and answer for the questions regarding

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Need the full method and answer for the questions regarding notes, t accounts, cash flow and journal entriesASSESSMENT 3: INDIVIDUAL ASSIGNMENTACFI2011 TRIMESTER 2, 2021 (PSB)Due Date 11:59pm SGT, Sunday 25th July 2021 (Week 10)Submission Submit a copy of the assignment through TurnitinWeighting 20% of the final markQuestion 1 (4 marks)A corporation with a balance sheet date of December 31 has a foreign long-term liability that is not covered by a foreign exchange contract. The foreign currency amount was converted at the closing rate on December 31, 2021, and is shown in the accounting records at the Australian Dollars (AUD) 2.0 million.The local currency sharply decreased against the US dollar on February 27, 2022. On this date, the management decided to decrease further risk by using a foreign exchange contract, because of which the debt was limited to AUD 6.0 million. If this situation were to apply at the balance sheet date, it would result in the corporation’s liabilities exceeding the fair value of its assets.Required:Explain how the above event should be disclosed in face and note of the December 31, 2021 financial statements. (4 marks)Question 2 (5 marks)The following is a summary of the annual financial statements of Texton Ltd.Texton Ltd.Income StatementFor the Year Ending September 30, 2021$Revenue 850,000Cost of sales (637,500)Cross profit 212,500Administrative expenses (28,100)Operating expenses (73,600)Profit from operations 110,800Finance cost (15,800)Profit before tax 95,000Income tax expense (44,000)Profit for the period 51,000Texton Ltd.Statement of Changes in EquityFor the Year Ending September 30, 2021Sharecapital ($) Revaluationreserve ($) Accumulatedprofit ($) Total ($)Balance—beginning of the year 120,000 121,000 241,000Revaluation of buildings 20,000 20,000Profit for the period 51,000 51,000Dividends paid (25,000) (25,000)Repayment of share capital (20,000) (20,000)Balance—end of the year 100,000 20,000 147,000 267,000Texton Ltd.Balance SheetOn September 30, 20212021($) 2020($)Noncurrent Assets Property, plant, and equipmentOffice buildings 250,000 220,000Motor vehicles 35,000 20,000Machinery 6,000 4,000Long-term loans to directors 64,000 60,000355,000 304,000Current AssetsInventories 82,000 42,000Debtors 63,000 43,000Prepaid Expenses 21,000 16,000Bank – 6,000166,000 107,000Total Assets 521,000 411,000Equity and Liabilities Capital and ReservesShare Capital 100,000 120,000Revaluation Reserve 20,000 -Accumulated Profits 147,000 121,000267,000 241,000Noncurrent LiabilitiesLong-Term Borrowings 99,000 125,000Current LiabilitiesCreditors 72,000 35,000Bank 43,000 -Taxation Due 40,000 10,000155,000 45,000Total Equity and Liabilities 521,000 411,000Additional information1. The depreciation charges included in operating expenses are as follows:Motor vehicles $25,000Machinery $ 2,0002. Fully depreciated Motor vehicles with an original cost price of $15,000 was sold for $5,000 during the year. The profit is included in operating expenses.3. The chief accountant claims that the company is heading for a potential liquidity crisis. According to him, the company struggled to meet its short-term obligations during the current year.Required:a) Prepare the cash flow statement using the direct method. (4 marks)b) Comment on the Chief accountant’s claim. (1 marks)Question 3 (2 marks)Texas Inc. is a manufacturer of suitcases that are sold at F2C outlets. The following transactions and events occurred during the year under review:a. From the beginning of the year, the remaining useful life of the plant and equipment was estimated at 4 years instead of 7 years. (0.5 marks)b. Bonuses of $12 million, compared with $2.3 million in the previous year, had been paid to employees. The CFO explained that a new incentive scheme has been approved since all employees are involved in increasing sales. (0.5 marks)c. There was a $1.25 million profit on the nationalization of land. (0.5 marks)d. During the year the company was responsible for establishing the ECA Foundation, which provided funding to welfare organizations. This foundation is part of the companys social investment program. The company contributed $7 million to the fund. (0.5 marks)Required:Explain how each of the transactions and events mentioned above would be treated in the current year statement of profit and loss. (2 marks)Question 4 (4 marks)The following information relates to the individual equipment items of a business unit at the balance sheet date:Carrying amount $ Fair value less costs to sell$ Value in use $Caster Racks 119,000 121,000 114,000Double Cone Blender (note 1) 237,000 207,000 205,000Grinding Machine (note 1) 115,000 11 7,000 123,000Deduster 83,000 75,000 79,000Bus (note 2) 31,000 26,000 —Further information1. Double Cone Blender and Grinding Machine are carried at revalued amounts, and the cumulative revaluation surpluses included in equity for the items are $12,000 and $6,000 respectively. Both items are manufacturing equipment.2. Bus is used for transporting employees in the mornings and evenings. It is not possible to determine the value in use of the bus separately because the bus does not generate cash inflows from continuing use that are independent of the cash flows from other assets.Required:Explain the major issues related to the possible impairment of the above-mentioned items. (4 marks)Question 5 (5 marks)The following data from Singapore Ltd accounts relates to two assets at 30 June 2021.Asset Value Accumulated depreciation Carrying amountLand $ 4 300 000 0 $ 4 300 000Plant and equipment $ 600 000 $100 000 $ 500 000At 30 June 2021, Singapore Ltd decides to adopt the revaluation model for both these assets. On this date land has a fair value of $4 000 000 and plant and equipment has a fair value of $600 000. On 30 June 2022 Singapore Ltd reviews the value of its assets. The fair value of land is reassessed as $4 250 000. Plant and equipment has no change in value on that date.Required:Prepare the journal entries required to revalue the assets for the year ended 30 June 2021 and the 30 June 2022. (5 marks)APPENDIX A: PRESENTATION REQUIREMENTS (Departures may attract a penalty)1. The assignment is required to be submitted through Turnitin by the due date;2. It is worth 20% of the final grade;3. The assignment will be marked on the basis of a requirement of -suitable for publication-, that is, the relevant statements/notes comprise an external report;4. The assignment must be performed individually;5. You are to employ an aggregated format whenever appropriate and consistent with provision of minimum line items prescribed in AASB101;6. You are not to use specialized accounting software packages, such as are employed by professional accounting firms, to produce your financial reports. The assignment is to give you an understanding of the processes, principles and customization required in preparing a set of financial statements and the notes to the accounts.7. You are to apply the function of expense or cost of sales method to the classification of expenses in the income statement (see AASB101 paras 97-105);8. You are directed to use the current/non-current format for the statement of financial position (balance sheet);9. The coversheet must have student ID and nameAPPENDIX C: General Marking Criteria for theoretical/essay questions10 8 6 4 2Accounting Excellent Clear Accurate Limited inaccurateKnowledge analysis analysis but limited grasp of understandingand and knowledge accounting ofdiscussion competent regarding concepts accountingof use of accounting and the concepts andaccounting accounting concepts relevant the relevantconcepts concepts and the standard standardand the accounting relevantrelevant concepts standardstandard and therelevantstandardCritical Fully Developed Assertions Assertions Lack ofevaluation developed and and and assertions andand supported analysis analysis analysis,supported assertions exist but exist but developmentassertions and are not are not and/orand analysis developed developed supportanalysis or orsupported supportedadequately accuratelyStructure Particularly Consistent Paragraph Weak Lack of focus/Language clear focus and flow and paragraphwith logical good transitions structuretransitions transition are andthroughout adequate illogicaltransitions

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