Reference no: EM132591955 , Length: 500 Word

ABSAS SOLUTIONS PVT LTD TEST ASSIGNMENT - Accounting and Finance Test

This test assignment has been divided into two parts. First part contains an essay of 500 words on the topic provided and second part includes numerical questions of finance.

Kindly complete both the parts. Make sure that your essay is plagiarism free and you have provided proper calculations in the practical part.

PART 1 -

Please write an essay of approximately 500 words on the topic provided below. Make sure that you do not copy paste anything from internet, you can see the required material from internet but you need to write each and every sentence in your own words.

Topic: Whether banking and supervisory structures at EU level proved adequate in responding to the debt crisis.

Referencing: APA (Minimum 7 References)

PART 2 - Please solve both the questions using MS EXCEL

Question 1 - A firm whose cost of capital is 10% is considering two mutually exclusive projects X and Y, the details of which are:

	Year	Project X	Project Y
Cost	0	Rs. 70,000	Rs. 70,000
Cash Inflows	1	Rs. 10,000	Rs. 50,000
		Rs. 20,000	Rs. 40,000
		Rs. 30,000	Rs. 20,000
		Rs. 45,000	Rs. 10,000
		Rs. 60,000	Rs. 10,000

Compute the Net Present Value at 10%, Profitability Index, and Internal Rate of Return of the two projects.

Question 2 - Nick Ltd acquired 100% of the issued capital of Wing Ltd on 1 July 2011 for $270000. The statements of financial position of the companies immediately after the acquisition are provided below. All assets have been reported following fair value.

Statement of Financial Position For the year ended 1 July 2011
	Nick Ltd $	Wing Ltd $
Shareholders' equity
Share capital	450,000	180,000
General reserve	45,000	25,000
Retained earnings	140,000	20,000
Total shareholders' equity	635,000	225,000
Assets
Current assets
Cash at Bank	50,000	30,000
Accounts Receivable	20,000	10,000
Inventory	100,000	25,000
	170,000	65,000
Non-current assets
Investment in Wing Ltd	270,000	----
Land	250,000	200,000
Plant & Equipment	100,000	80,000
	620,000	280,000
Total assets	790,000	345,000
Liabilities
Current liabilities
Accounts Payable	40,000	10,000
Interest Payable	15,000	8,000
	55,000	18,000
Non-current liabilities
Bank loan	100,000	102,000
Total liabilities	155,000	120,000
Net assets	635,000	225,000

Required -

1. Calculate Goodwill (show workings).

2. Prepare consolidation journal entry at the date of acquisition.

3. Prepare consolidation worksheet.

4. Prepare the consolidated statement of financial position as at 1 July 2011 (immediately after the acquisition).