Accounting Assignment | College Homework Help

Submission Guidelines


  1. the document to be typed using 1.5 spacing justified
  2. use Ariel font size 11
  3. display a 2.5 cm margin for all sides
  4. include page number



Case 1: (15 marks)

  1. Explain the nature of business combination? (5 marks)
  2. Explain, with examples, the accounting for business combination through direct or indirect acquisitions? (5 marks)
  3. Please explain the difference between New vs old lease accounting standard (AASB 117 Leases, AASB 16 Leases)? (5 marks)


Case 2:  (15 marks)

On 1 July 2017, Chancellor Ltd purchased 90% of the issued shares of Park Ltd for

$800,000. At this date, the fair value of the NCI in Park Ltd was $88,500. The following balances appeared in the records of Park Ltd at this date:

Share capital $400,000
General reserve 40,000
Retained earnings 200,000

At 1 July 2017, all the identifiable assets and liabilities of Park Ltd were recorded at fair value except for the following:

Carrying amount Fair value
Equipment (cost $720,000) Inventories $600,000 320,000 $800,000 400,000
Land 360,000 400,000

The equipment had a remaining useful life of 4 years beyond 1 July 2017, with benefits to be received on a straight-line basis over the period. By 30 June 2018, all the inventories were sold externally. Any adjustments for differences at acquisition date between carrying amounts and fair values are made in the consolidation worksheet.

For the year ended 30 June 2019, the following information is available:

  • During the year, Park Ltd sold inventory to Chancellor Ltd for $800,000. Theoriginal cost of the inventory was $640,000. At 30 June 2019, Chancellor Ltd had 20% of the inventory onhand.
  • On 1 January 2019, Park Ltd sold an item of equipment to Chancellor Ltdfor

$20,000 at a before-tax profit of $4,000. Chancellor Ltd treated the asset as part of its inventory and it was still on hand at 30 June 2019.

  • On 1 July 2018, Chancellor Ltd sold some equipment to Park Ltd for $40,000. The carrying amount of the equipment at this date was $24,000. Park Ltd treated the asset as a non-current asset and depreciated it using the straight-line method over 5 years.
  • The tax rate is30%.
  • Financial information for Park Ltd for the year ended 30 June 2019 includes the following:
Profit after tax

Retained earnings (1/7/18)



Interim dividend paid 160,000
Final dividend declared 80,000
Retained earnings (30/6/19)  




Prepare the following for the preparation of consolidated financial statements for Chancellor Ltd and its subsidiary Park Ltd for the year ended 30 June 2019 assuming that Chancellor Ltd uses the full-goodwill method:

  1. Acquisitionanalysis (3marks)


  1. Businesscombinationvaluationreserve(BCVR)worksheetentries (5marks)


  1. Pre-acquisitionworksheetentry (3marks)


  1. Non-controlling interest (NCI)worksheetentries (3marks)


  1. Elimination worksheet entries for intra-group transactions and associated non- controlling interest (NCI)worksheetentries. (6 marks)

Case 3:  (10 marks)


Cobber Ltd is an Australian company and its functional currency is A$ (i.e. Australian dollars).Thecompanyhasreportingperiodsendingon31Decemberand30June.During the year ended 30 June 2019, Cobber Ltd entered into the following foreign currency transactions denominated in Euros(€):

  • On 22 November 2018, Cobber Ltd ordered some equipment costing €250,000 from a German company under a FOB destination contract. The equipment was delivered on 4 December 2018. On 3 February 2019, Cobber Ltd paid the invoice for the equipmentpurchase.

Applicable exchange rates are as follows:

1 July 2018 €1 = A$1.45
22 Nov 2018 €1 = A$1.42
4 Dec 2018 €1 = A$1.39
31 Dec 2018 €1 = A$1.49
3 Feb 2019 €1 = A$1.28
30 June 2019 €1 = A$1.25



InaccordancewithAASB121/IAS21TheEffectsofChangesinForeignExchangeRates, prepare the journal entries in the books of Cobber Ltd for the half year to 31 December 2018 and the full year to 30 June 2019 to account for the various foreign currency transactions.

Case 4: (10 marks):

Sippy Ltd owns 30% of the issued shares of its associate, Downs Ltd. At the date of acquisition, there were no differences between the fair values and the carrying amounts of the identifiable net assets of Downs Ltd.

For the year ended 30 June 2018, Downs Ltd recorded an after-tax profit of $786,000. The tax rate is 30%.

The following transactions have occurred between Sippy Ltd and Downs Ltd:

  • Sippy Ltd sold some equipment to Downs Ltd on 1 July 2017 for $115, 000. The equipment had a carrying amount of $87, 000 in the books of Sippy Ltd at the date of sale. Downs Ltd uses a 25% p.a. rate to depreciate its equipment using the straight-linemethod.
  • On 23 April 2018, Downs Ltd sold some inventories to Sippy Ltd for $62,000. The original cost of the inventories was $45,000. Sippy Ltd still had all of the items on hand at 30 June2018.
  • On 1 January 2017, Downs Ltd sold an item of equipment with a carryingamount of $37, 000 to Sippy Ltd for $52, 000. Sippy Ltd applies a 20% p.a. straight-line depreciation rate to itsequipment.

Sippy Ltd applies the equity method to account for its investment in Downs Ltd and does not prepare consolidated financial statements.



Calculate Sippy Ltd’s share of Downs Ltd’s profit for the year ended 30 June 2018.

End of Assessment

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