|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|
|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.|
|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 Standards
Number 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.
|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
Cost of Sales 142,000
Commission received 20,000
Interest received 8,000
Distribution expenses 35,000
Marketing expenses 20,000
Occupancy expenses 41,000
Administration expenses 53,000
Other expenses 22,000
Finance cost expenses 10,000
|Share capital at 1 July 2014 was 800,000 ordinary shares of $ 1.00 each, fully paid|
|The company issued 200,000 ordinary shares on 1 May 2015 at $1.15 each, fully paid|
|Administration expenses included:|
|Audit fees:||$ 6,000|
|Fees for taxation services paid to the auditors:||$ 4,000|
|Depreciation of property, plant & equipment:||$12,000|
|Retained earnings balance 1 July 2014 (credit)||$122,000|
|General reserve balance 1 July 2014||$ 10,000|
|Transferred during the year to general reserve from retained earnings||$15,000|
|Asset Revaluation Reserve balance 1 July 2014||$25,000|
|The previous valuation of Land and Buildings was||$425,000|
|A revaluation of Land and Buildings on 30 June 2015 by the director||$445,000|
|A fully franked interim dividend of $0.02 (2 cents) per ordinary share was paid on 15 March 2015 for 800,000 ordinary shares|
|The directors declared a proposed final dividend of $0,035 (3.5 cents) per ordinary share, fully franked, on 30 June 2015|
|Income tax expense for the year is||$26,000|
|Franking credits available at the end of the year were||$18,225|
a) Prepare Statement of Comprehensive Income with both expenses (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) Prepare the following notes to support the income statement and statement of changes in equity:
- Profit for the period
- Dividend franking 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|
|Cost of sales||-142000|
|Distribution expenses -35000|
|Marketing expenses -20000|
|Occupancy expenses -41000|
|Administrative expenses -53000|
|Other expenses -22000|
|Finance costs -10000||-181000|
|Income tax expense||-26000|
|Gain on revaluation of property 20000|
|Income tax on other comprehensive income -6000||14000|
For theyear ended30June2015
|Retained earnings||General reserve||Asset revaluation reserve|
|Balance 1 July 2014||122000||10000||25000||800000||957000|
|Total comprehensive income for the year||61000||14000||75000|
|Transfer to general reserve||-15000||15000|
|Issue of share capital||230000||230000|
|Balance 30 June 2015||117000||25000||39000||1030000||12111000|
|Profit has been determined after charging/crediting the following items:|
|Depreciation of plant & equipment||12000|
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:
|Cash at bank||18,285|
|Inventory (at cost)||48,500|
|Land & Buildings (at director‘s valuation 2014)||785,000|
|Plant & Equipment (at cost)||286,350|
|Investments (at market value)||52,635|
|Goodwill (at cost)||28,700|
|Trademarks (at cost)||25,200|
|Deferred Tax asset||6,900|
|Allowance for doubtful debts||1,350|
|Accumulated depreciation – Buildings||39,650|
|Accumulated depreciation – Plant & Equipment||79,420|
|Accumulated impairment – Goodwill||11,700|
|Deferred Tax liability||3,100|
|Provision for Long Service Leave||13,600|
|Asset Revaluation Reserve||35,000|
- 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.
- Buildings were revalued by the directors on 30 June 2016 to $365,000.
- Long service leave payable within the next twelve months is $3,100.
- Prepare the Statement Of Financial Position for Red Excitement Ltd as at 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
|Note 11Property, Plant&Equipment|
|Note 12Availablefor Saleinvestments|
|Note 14 Other Intangible assets|
|Note 15 Deferred Tax assets|
|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
Retained Earnings $300,000
Additionalinformationfor theyear ended30 June2016:
Rule Ltd to Book Ltd $11,000
Book Ltd to 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.
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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