Financial Accounting Assignment
This assessment task is designed to test a student's achievement of learning objectives set in MAA716 Unit Guide. It is an individual assessment task. This assignment must be submitted for the successful completion of this unit. It will count to a maximum of 13% towards the final mark.
The Assignment is consisted of two sections: Section One - Consolidation (Journal entries)
Submission
The completed assignment must be submitted into the allocated area in CloudDeakin under the Dropbox folder. The Dropbox will remain open for late submission. A penalty of 30% per day will be applied to late submission.
When uploading your assignment, give the document a name using the following syntax:
Should you requires a time extension in relation to this assignment, you need to contact the Unit Chair via email ([email protected]) prior to the due date of the assignment, supported by documentation, e.g. medical certificate. No extension will be granted if you don't provide supporting documents. Please note that extensions will only be given for exceptional and unusual circumstances outside the student's control.
CloudDeakin discussion
A particular discussion forum for the Assignment Part C has been created in CloudDeakin to facilitate peer discussion. Feel free to post queries if you need to seek further clarification from teaching staff. CloudDeakin discussion forum however is not an area for the answer to be shared among students.
A note on plagiarism and collusion
Plagiarism and collusion are forms of cheating and is considered a serious academic misconduct, and severe penalties are associated with them. Please refer to the MAA716 Unit Guide for your responsibilities with regard to plagiarism and other academic offences.
Section One Consolidation Journal Entries
Dean Ltd acquired all the issued share capital of Diane Ltd on 1 January 2012 for cash $200,000. On the acquisition date, the equity of Diane Ltd is consisted of:
• Share capital - $125,000
• General reserve - $31,250
• Retained earnings - $25,000
All the identifiable assets and liabilities of Diane Ltd were recorded at fair value except for some depreciable plant and machinery, which had a carrying amount of $106,250 (cost $125,000) and fair value of 112,500. The remaining useful life was 10 years. The fair value adjustments would be made on consolidation rather than on Diane's own accounting book.
Additional information shows:
1. During the current period, Dean Ltd sold inventory to Diane Ltd for $25,000. This had originally cost Dean Ltd $22,750 to manufacture. By 31 December 2016, Diane sold half of the inventory to Brit Ltd for $15,388.
2. Dean Ltd's opening inventory includes inventory purchased from Diane Ltd for $109,000. The inventory had originally costed Diane Ltd $89,000 to purchase.
3. At 1 January 2016, Diane Ltd sold a machine to Dean Ltd for $180,000. This item had a carrying amount at time of sale to Diane Ltd of $120,000 (original cost $200,000, accumulated depreciation $80,000). The remaining useful life of the machine is 12 years for both entities.
4. Dean Ltd provided computer services cost $36,000 to Diane Ltd during the current financial year. At 31 December 2016, $3,000 remained unpaid.
5. On 1 January 2015, Diane Ltd sold a plant to Dean Ltd for $22,000. Diane Ltd recorded a profit of $8,000 before tax. The remaining useful life was 10 years at the time of this intra-group transaction.
6. Diane Ltd declared final dividend of $10,000 from its current year's profit.
7. Goodwill had been impaired by 10% in the first year following the acquisition. During the year ended 31 December 2016 it was considered that the goodwill has been further impaired by an amount of $3,000.
8. The tax rate is 30%.
Required:
Prepare all necessary consolidation adjusting journal entries for the year ended 31 December 2016, according to the requirements of AASB 10 Consolidation Financial Statements (no narrations required for journal entries), assuming the financial year for Dean Ltd and Diane Ltd is as same as the calendar year.