Taxation time quiz, 2 calculation need in 90mins. NOW!
Sharonhy
RevisionQuestion1.docxBUS356 CONTEMPORARY FINANCIAL ACCOUNTING
Mid-Term Revision Questions
Question 1
Sport’s Field Ltd was registered on 31 January 2019. It invited the public to subscribe to the issue of 35,000 ordinary shares for $1 per share with $0.60 due on application, $0.30 due on allotment and the balance due on call.
|
Jan 10 Mar 1 Mar 2 Mar 31 Nov 1 Nov 30 |
Prospectus is issued Received applications for 35,000 shares Allotted 35,000 ordinary shares All allotment money received Remaining capital called All money due on call is received |
Required:
a) Journalise the transactions in the general journal
b) What is the share capital of Sport’s Field at 1 December?
Question 2
Gift Ltd has two cash generating units: Blue and Box. A comparison of these CGUs and their recoverable amounts are shown below:
|
|
CGU - Blue |
CGU - Box |
|
Property, plant and equipment |
$1,000,000 |
$900,000 |
|
Goodwill |
300,000 |
200,000 |
|
Accumulated impairment - goodwill |
(100,000) |
(50,000) |
|
Carrying amount |
1,200,000 |
1,050,000 |
|
Recoverable amount |
1,100,000 |
880,000 |
|
Impairment loss |
100,000 |
170,000 |
Required:
Prepare the general journal entries to write down the goodwill.
Question 3
Wombat Ltd’s balance sheet and statement of financial position shows an item of machinery that cost $150,000 and that has accumulated depreciation of $40,000. For taxation purposes the asset has a net value of $90,000. Wombat Ltd also has interest receivable of $15,000 which will not be taxed by the ATO until it is received. Wombat has a provision for warranty expenses with a balance of $100,000. All of the provision was created in the current financial year, and no amounts have been paid. The warranty expense is not deductible until such time as the costs associated with the warranty are actually paid. The tax rate is 30 percent.
Required:
Calculate any deferred tax assets and liabilities for Wombat Ltd and provide the relevant journal entries.
Question 4
Pinot Ltd acquired some machinery at a cost of $1 million, which it accounts for using the cost method. As at 30 June 2020 the machinery had accumulated depreciation of $200,000. On 30 June 2020 it was determined that the machinery could be sold at a price of $650,000 and the costs to sell would be $20,000. Alternatively, the machinery is expected to have a useful life of 5 years and the net cash flows expected to be generated from the machine would be $180,000 over each year. At 40 June 2020 it is expected that the market would require a rate of return of 7 per cent on this type of asset.
Required:
