Reference no: EM132279227
CORPORATE ACCOUNTING Assignment -
PART I - EZY MANUFACTURING LTD (Ezy)
Required:
(1) Prepare the general journal entries in the accounting records of Ezy Manufacturing Ltd to record the
a) Acquisition of investments in,
i) Range Pty Ltd on 1 July, 2015;
ii) Swift Works Ltd on 1 July, 2017;
b) Dividend received or receivable during the year ended 30th June, 2019.
(2) Prepare acquisition analyses for Ezy Manufacturing Ltd's investments in subsidiaries on the respective dates of acquisition.
(3) Prepare the consolidation journal entries* required to prepare the consolidated worksheet of the Ezy Group as at 30 June 2019. Show all workings providing explanations and justifications with reference to appropriate accounting standards, where necessary.
*The consolidation journal entries must address
a) Differences between fair value and book value of identifiable net assets acquired by Ezy on the dates of acquisition;
b) Elimination of investments in subsidiaries;
c) Recognition of 'Goodwill' or 'Gain on Bargain Purchase';
d) Elimination of intercompany transactions and balances, such as,
i) Dividends paid or payable by subsidiaries;
ii) Intercompany sales of inventory;
iii) Unrealised profit in closing inventory;
iv) Unrealised profit in opening inventory;
v) Intercompany sale of non-current asset;
vi) Intercompany receivables and payables.
vii) Intercompany revenues and expenses
e) Tax effect adjustments, where necessary.
(4) Complete the consolidated worksheet of the Ezy Group for the year ended 30 June 2019. An incomplete proforma consolidation worksheet of the Ezy Group is available on VU Collaborate in Excel format.
PART II - Topic: Impairment of Assets
Get access to a copy of the 2018 Annual Report of Myer Ltd. Then refer to the NOTES to the Consolidated Financial Statements of Myer Holdings Intangible Assets (C2).
Answer the following questions:
1. Why is an impairment test considered necessary?
2. What effect does impairment have on a company's Balance Sheet and profit and Loss Statement?
3. What is the value of Goodwill for Myer Holdings at 29th July 2017 and 28th July 2018? Provide some possible reasons for this change.
4. Which other Intangible assets have been impaired between 2017 and 2018?
5. Explain what impact does changing (increasing or decreasing) the discount rate have on the calculation of impairment losses?
6. Can we reverse impairment losses for all assets? Explain.
Max: 500 words.
Attachment:- Assignment Files.rar