financial reports for corporate entities Coursework Assessment

Student Name

Student Number

Unit Code/s & Name/s
FNSACC514 Prepare financial reports for corporate entities
Assessment Name
Assessment Three
Assessment Task No.
AT3
Assessment Due Date

Date submitted

Assessor Name

Student Declaration: I declare that this assessment is my own work. Any ideas and comments made by other people have been acknowledged as references. I understand that if this statement is found to be false, it will be regarded as misconduct and will be subject to disciplinary action as outlined in the TAFE Queensland Student Rules. I understand that by emailing or submitting this assessment electronically, I agree to this Declaration in lieu of a written signature.
Student Signature

Date

Instructions to Student
General Instructions: Answer all four (4) questions including all individual tasks within the questions in this booklet. Ensure you write your name and student number in the space provided on this page, and then sign and date the Student Declaration. Include the assessment paper, marking criteria and Excel spreadsheet (Question 3) in your submission. State clearly in each question any assumptions you believe need to be made if additional information is required. Include these assumptions in your answers or in your working papers which are to be submitted with your answers. Save your document regularly to a USB or your computer as you work through this booklet.Information / Materials provided: Assessment paper with Qs 1-4 Excel template FNSACC514_AT3_TMP_Q2&3_ V1

Assessment Criteria: To achieve a satisfactory result, your assessor will be looking for your ability to demonstrate the following key skills/tasks/knowledge to an acceptable industry standard: Prepare the Statement of Comprehensive Income. Prepare the Statement of Changes in Income. Prepare appropriate notes to the Statements of Comprehensive Income and Changes in Income. Prepare the Statement of Financial Position. Prepare the notes for Non-Current Assets and Current Liabilities. Prepare the Consolidation Worksheet. Describe a range of methods and formats for presenting financial data. Identify and describe the key requirements of organisational policy and procedures relating to the presentation of financial reports. Provide guidelines for factors to be considered when management adopts accounting policies other than those prescribed by Australian Accounting StandardsNumber of Attempts: You will receive up to two (2) attempts at this assessment task. Should your 1st attempt be unsatisfactory (U), your teacher will provide feedback and discuss the relevant sections / questions with you and will arrange a due date for the submission of your 2nd attempt. If your 2nd submission is unsatisfactory (U), or you fail to submit a 2nd attempt, you will receive an overall unsatisfactory result for this assessment task. Only one re-assessment attempt may be granted for each assessment task. For more information, refer to the Student Rules.
Submission details(if relevant)
Insert your details on page 1 and sign the Student Declaration. Include this form with your submission. Due Date: Refer to Unit Study Guide and/or Learning Management System Assessment to be submitted via TAFE Queensland Learning Management System: Connect url: https://connect.tafeqld.edu.au/d2l/login Username; 9 digit student number For Password: Reset password go to https://passwordreset.tafeqld.edu.au/default.aspx>
Instructions to Assessor
This assignment is written based on prescribed text and additional online research. Students to complete all requirements listed in this assessment. This is an unsupervised written assessment. Assessment documents to be uploaded to Connect for marking. This is an untimed assessment. Students are allowed access to any notes, workbooks and the internet to complete the assessment. Students must complete their assessments as individuals Usual office WHS requirements should be met by students Physical conditions are at the students discretion Interactions with team members or supervisors should be limited to general instructions and clarification or explanation of the assessment requirements. Contingencies if conditions cannot be met are at the discretion of the Assessor. Please refer to marking guide to ensure consistency, validity and fairness of student outcomes.
Note to Student
An overview of all Assessment Tasks relevant to this unit is located in the Unit Study Guide.
Recoinage Ltd recorded the following operational income and expenses for the year ending 30 June 2015:
Revenue(Sales)$382,000

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CostofSales142,000
Commissionreceived20,000
Interestreceived8,000
Distributionexpenses35,000
Marketingexpenses20,000
Occupancyexpenses41,000
Administrationexpenses53,000
Otherexpenses22,000
Financecostexpenses10,000
Additionalinformation:
Sharecapitalat1 July 2014 was800,000ordinarysharesof$ 1.00 each,fully paid
Thecompanyissued200,000ordinaryshareson1 May2015 at$1.15each,fully paid
Administrationexpensesincluded:

Auditfees:
$ 6,000
Feesfortaxationservicespaidtothe auditors:
$ 4,000
Depreciationofproperty,plant&equipment:
$12,000
Retainedearningsbalance1 July 2014(credit)
$122,000
Generalreservebalance1 July 2014
$ 10,000
Transferredduringtheyeartogeneralreservefromretainedearnings
$15,000
AssetRevaluationReservebalance1 July 2014
$25,000
ThepreviousvaluationofLandandBuildingswas
$425,000
ArevaluationofLandandBuildingson30June 2015bythe director
$445,000
Afullyfrankedinterimdividendof$0.02(2cents)perordinarysharewas paidon15 March2015 for800,000ordinaryshares

Thedirectorsdeclaredaproposedfinaldividendof$0,035(3.5cents)perordinaryshare,fully franked,on30June 2015

Incometaxexpenseforthe yearis
$26,000
Franking creditsavailableatthe endoftheyearwere
$18,225
Required:
a)PrepareStatementofComprehensiveIncomewithbothexpenses(classified by function) and revenues disclosed on the face of the statement.
b) Prepare a Statement of Changes in Equity disclosing all movements on the statement.
c)Preparethefollowingnotestosupporttheincomestatementandstatementof changes in equity:
Profitforthe period
Dividends
Dividendfranking credit
Recoinage Ltd’s Policy And Procedures Manual requires the use of the format/templates provided on the following pages.
NOTE: Prior year comparative figures are NOT required.
Statement of Comprehensive Income for theyear ended30 June2015
Revenue (sales)
38200
Costofsales
-142000
Grossprofit
240000
Otherincome
28000

268000
Distributionexpenses -35000

Marketingexpenses -20000

Occupancy expenses -41000

Administrative expenses -53000

Otherexpenses -22000

Financecosts -10000
-181000
Profitbefore incometax
87000
Incometaxexpense
-26000
Profitaftertax
61000
OtherComprehensiveIncome

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Gain on revaluation of property 20000

Incometaxonothercomprehensiveincome -6000
14000
Totalothercomprehensiveincome

TotalComprehensiveIncome
75000
Statementof changesinequityFor theyear ended30June2015

Reserves
Share Capital
Totalequity

Retainedearnings
Generalreserve
Asset revaluation reserve

Balance 1 July 2014
122000
10000
25000
800000
957000
Total comprehensive income for the year
61000

14000

75000
Dividends
-51000

-51000
Transfer to general reserve
-15000
15000

Issue of share capital

230000
230000
Balance 30 June 2015
117000
25000
39000
1030000
12111000
Profitfor theperiod
Profit hasbeendeterminedaftercharging/creditingthefollowingitems:
Commission received

-20000
Interest received

-8000
Auditor’s remuneration

Audit services
6000

Taxation services
4000
10000
Depreciation of plant & equipment

12000
Dividendspaidor declared:
Interim dividend paid
2 cents per share on 300,000 share fully franked @ 30% 16,000 declared final dividend
3.5 cent per share on 1,000,000 shares fully franked @ 30% 35,000
Dividend franking account:
Franking credit available for payment of dividend in subsequent years 18225
The trial balance of Red Excitement Ltd as at 30 June 2016 disclosed:

$
$
Cashat bank
18,285

Pettycash
1,500

AccountsReceivable
51,385

Inventory(atcost)
48,500

Land&Buildings(atdirector‘svaluation2014)
785,000

Plant &Equipment(atcost)
286,350

Investments(atmarketvalue)
52,635

Goodwill(atcost)
28,700

Trademarks(atcost)
25,200

DeferredTax asset
6,900

Allowancefordoubtfuldebts

1,350
AccountsPayable

24,910
AccruedExpenses

4,655
Accumulateddepreciation–Buildings

39,650
Accumulateddepreciation–Plant&Equipment

79,420
Accumulatedimpairment–Goodwill

11,700
TaxationPayable

26,255
DeferredTax liability

3,100
Mortgage

210,000
ProvisionforLongServiceLeave

13,600
General Reserve

100,000
AssetRevaluationReserve

35,000
Share Capital

650,000
RetainedEarnings

104,815

1,304,455
1,304,455
Additionalinformation:
Investments are shares in companies listed on the Australian Stock Exchange.
The mortgage, secured by land & buildings, is due to be repaid in three equal instalments, due on 30 June each year.
Land was revalued by the directors on 30 June 2016 to $420,000.
Buildingswererevaluedbythe directorson30June 2016to $365,000.
Long service leave payable within the next twelve months is $3,100.
Required:
Preparethe Statement Of Financial PositionforRedExcitementLtdasat 30 June 2016, using the template provided in Microsoft Excel(FNSACC514_AT3_TMP_Q2&3_TQM_V1).
Prepare the notes for the Non-Current Assets and the Current Liabilities sections ONLY of the balance sheet.
Create and submit 2 charts (using 2 different chart types). One will summarise Total Assets, and the second chart will summarise Total Liabilities.
Red Excitement Ltd’s Policy and Procedures Manual requires the use of provided templates.
Extract of Notes to Balance Sheet
NON-CURRENTASSETS

Note 11Property, Plant&Equipment

Note 12Availablefor Saleinvestments

Note 13Goodwill

Note 14 Other Intangible assets

Note 15 Deferred Tax assets

CURRENT LIABILITIES

Note 16 Trade & Other payables

Note 17 Current portion of Long Term borrowings

Note 18 Current Tax liabilities

Note 19 Short Term provisions

Note 20 Other Current liabilities

Rule Ltd acquired all the issued capital of Book Ltd on 1 July 2014 for $1,500,000. At that date the shareholders’ equity of Book Ltd was:
Share Capital $1,100,000
RetainedEarnings $300,000
Additionalinformationfor theyear ended30 June2016:
Inter–companysales:
Rule Ltd to Book Ltd $11,000
BookLtdto Rule Ltd $19,000
Unrealised profits in closing inventory as at 30 June 2016 is $2,400 for goods sold by Book Ltd to Rule Ltd and $1,200 for goods sold by Rule Ltd to Book Ltd.
Unrealised profit in opening inventory for goods sold by Rule Ltd to Book Ltd as at 1 July 2015 is $2,100 and for goods sold by Book to Rule is $1,400.
Rule Ltd employees provide legal advice to Book Ltd. For these services, Book Ltd pays an annual fee of $8,000 per annum.
The final dividend of $16,500, declared as at 30 June 2015, was paid by Book Ltd in October 2015.
An interim dividend of $14,000 was paid on 31 January and a final dividend was declared $20,000 at 30 June, 2016.
On 30 June 2016, Rule Ltd purchased a motor vehicle from Book Ltd for $15,000. Book Ltd made profit on this sale of $3,500.
Book Ltd raised funds from Rule Ltd by borrowing $100,000 at an interest rate of 10% per annum. The annual interest charge was paid by Book Ltd on 30 June 2016.
The directors review the balance of goodwill each year. They agree that for the year ended 30 June 2016, goodwill is to be unpaired by $20,000.
Required:
Students must complete and submit the Consolidation worksheet provided in Microsoft Excel (FNSACC514_AT3_TMP_Q2&3_ V1).
Describe a range of methods and formats for presenting financial data.
Include in your answer a description of the key requirements of organisational policy and procedures relating to the preparation of financial reports.
Consider, for example, when management may use their own judgement to adopt, in accordance with organisational policy, accounting policies different to those prescribed by Australian Accounting Standard(s), and that would in their opinion produce information that is more reliable and relevant than if Australian Accounting Standard(s) had been used.
What guidelines are there for factors which might be considered when exercising this judgement?

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