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Adjusted S1 2015 Exam Marking Guide
Adjusted S1 2015 Exam Marking Guide
Adjusted S1 2015 Exam Marking Guide
1
Question 3 Foreign Operations SOLUTION (13 marks in total)
Requirement 1.
GBP Rate A$
Sales 252,000 0.55 458,182 1
Expenses -230,000 0.55 -418,182 1
Profit 22,000 40,000
Retained earnings (01/01/13) 60,000 0.60 100,000 1
Retained earnings (31/12/13) 82,000 140,000
Share capital 240,000 0.60 400,000 1
Foreign currency translation 0 104,000
reserve 1
Total Equity $ $
322,000 644,000 1
Requirement 2
Profit 22,000
Profit as translated 40,000 AUD c/f
Profit @ closing rate (22,000/0.5) 44,000 AUD 1
Translation gain (loss) 4,000 AUD 1
104,000
Total 4
2
Requirement (1) (5 marks)
Acquisition analysis
Net FV of identifiable assets & liabilities:
Share capital 200,000
General reserve 30,000
Retained earnings 28,000
Inventory 4,200
Property Plant & Equipment 10,500
$ 272,700 1 mark (½ mark if not all included)
DTL 1,500
ITE 1,500 1 mark for jnl entry
3
Pre-acquisition entries @ 30/6/17 - Parent
Share capital 150,000
General reserve 22,500
Retained earnings 21,000
BCVR 11,025
Goodwill 31,725
Shares in Dalia Ltd 236,250 2 marks for jnl entry
Required
Year ended 30 June 2018
Retained Earnings 1,000
4
Cost of Sales 1,000 1 mark
ITE 300
Retained Earnings 300 1 mark
Required
Year ended 30 June 2018
DTA 1,200
0.5 mark for jnl
ITE 1,200 entry
5
Q 5 (10 marks in total)
After- tax Profit for the period ending 30 June 2015 80,000 1
Adjustments:
Realised profit on equipment sold 1/7/12(a)
(20% x $4000 x (1-30%)) 560 1
Cash DR 2,500
Investment in Peony Ltd CR 2,500 1
(Dividend declared in previous year received from Associate)
[25% x $10,000]
Cash DR 1,875
Investment in Peony Ltd CR 1,875 1
(Interim dividend received from Associate)
[25% of $7,500]
10