Unit: ACC204 – Superior Monetary Accounting
Weighting: The project is price 40% of the entire unit weight.
Due Date: seventh April, 2018
1. College students are required to cowl all acknowledged necessities.
2. Your reply should be each uploaded to Moodle in phrase file, no printed copy required.
three. You should assist your solutions with acceptable Harvard fashion references the place vital.
four. Solely embrace data in your appendixes that has been straight referred to within the physique of your doc.
5. Embody a title/cowl web page containing the topic title and code and the identify, scholar id numbers.
6. Please save the doc as ACC204_T1_B1_first name_Surename_Student Quantity
You’re required to complete every of those questions, complete 40 marks. Please give the options intimately, present calculations and submit the options to Moodle utilizing a single file, it may be Excel format, Phrase format or PDF format, no requirement on phrase limits. If any reference was used, please confer with Harvard fashion. Query 1 (10 marks), Query 2 (10 Marks), Query three (10 Marks), Query four (10 Marks).
1. As defined throughout the Chapter eight, intangible asset, Australian accounting requirements now prohibit goodwill from being topic to amortisation. Fairly, there’s a requirement that goodwill be topic to impairment testing. In relation to impairment testing of goodwill, Petersen and Plenborg (2010, p.420) state:
Many argue that an impairment check solely strategy appears a logical step within the improvement of accounting for goodwill. First, the underlying logic for eradicating the standard amortization methodology is that the amortization on a straight-line foundation over quite a lot of years incorporates no data worth for these utilizing monetary statements (Jennings et al., 2001). Furthermore, IFRS three (IASB, 2004b) not requires that corporations carry out the just about unimaginable process of estimating the helpful lifetime of goodwill (Jansson et al. 2004). Second, the impairment strategy ought to present customers of monetary statements with higher data, as goodwill is just not routinely amortized (Colquitt and Wilson, 2002; Bens and Heltzer, 2005). Lastly, goodwill impairment exams could be operational and seize a decline within the worth of goodwill (Donnelly and Keys, 2002).
You’re to offer a transparent argument as to why you agree or disagree with the views supplied within the paragraph above.
2. On 1 July 2015 Kruger Ltd privately points $1 million in six-year debentures, which pay curiosity every six months at a coupon price of 6 per cent every year. On the time of issuing the securities, the market requires a price of return of four per cent. In keeping with the necessities of AASB 9, the debentures are accounted for utilizing the efficient curiosity technique.
(a) Decide the truthful worth of the debentures on the time of situation (which may also be their situation worth).
(b) Present the journal entries at:
(i) 1 July 2015
(ii) 31 December 2015
(iii) 30 June 2016.
three. Solar Metropolis Restricted commences building of a multi-purpose water park on 1 July 2014 for Pretoria Restricted. Solar Metropolis Restricted indicators a fixed-price contract for complete revenues of $50 million. The challenge is predicted to be accomplished by the tip of 2017 and Pretoria Restricted controls the asset all through the interval of building. The anticipated price as on the graduation of building is $38 million. The estimated prices of a building challenge may change all through the challenge—on this instance, they do change. The next information pertains to the challenge (the monetary years finish on 30 June):
2015 ($m) 2016 ($m) 2017($m)
Prices for the 12 months 10 18 12
Prices incurred so far 10 28 40
Estimated prices to finish 28 12 –
Progress billings in the course of the 12 months 12 20 18
Money collected in the course of the 12 months 11 19 20
(a) Utilizing the above information, compute the gross revenue to be recognised for every of the three years, assuming that the result of the contract will be reliably estimated.
(b) Put together the journal entries for the 2015 monetary 12 months utilizing the percentage-of-completion technique.
(c) Put together the journal entries for the 2015 monetary 12 months, assuming the stage of completion can’t be reliably assessed.
four. Anderson Pty Ltd is an Australian diversified industrial firm with its main enterprise exercise being to fabricate flotation units for infants and toddlers. Over the previous decade, the enterprise has been very worthwhile and the administrators, Simon Anderson and Lisa Anderson, have saved fee of dividends to a minimal to permit the corporate to diversify into different actions. The next is a listing of property, plant and gear held by the corporate:
Investments in corporations Carrying Worth ($) Present truthful worth ($)
Property, plant and gear
Manufacturing unit (NSW)
Land 100 000 150 000
– Value 70 000 80 000
– Amassed depreciation (20 000) –
Manufacturing unit (Qld)
Land 150 000 120 000
– Value 125 000 70 000
– Amassed depreciation (45 000) –
Mr Anderson informs you that the administrators intend to revalue the property, plant and gear in the course of the 12 months. The corporate has not revalued any property up to now.
(a) How would you account for the revaluation of the above property?
(b) What would the related journal entries be?