Reference no: EM131972132

Accountancy Capstone Assignment - Integrated Case Study

This assessment item assesses the following learning outcomes:

Knowledge and Technological Skills - Demonstrate and apply integrated discipline (including technical) knowledge across the broad field of business with depth in one or more core business disciplines.

Higher Order Thinking - Exercise independent judgment and initiative in adapting and applying knowledge and skills for effective planning, problem solving and decision making in diverse contexts.

ASSESSMENT REQUIREMENTS FOR EACH PART -

PART 1: Enter Year-End Adjusting Journal Entries into MYOB & Print out a revised Profit and Loss Statement and Balance Sheet from MYOB - in pdf format

a. Students are required to prepare and enter adjusting general journal entries directly into the MYOB data file to take into account all of the relevant and necessary adjustments (please include cents in all of your journal entries).

The MYOB data file is available on the AYB 339 Blackboard site for students to download The MYOB data file was created using MYOB AccountRight Enterprise (Educational Version 19). This version of MYOB is available in the student labs in both B and Z blocks.

However, students can use any version of MYOB to open the data file and make adjustments (provided it is version 19 or higher).

It will not be possible to open this MYOB data file if you use the MYOB trial versions available on the MYOB website or any version of MYOB lower than this version.

Unfortunately, under the terms and conditions of QUT's academic licence, MYOB has not provided us with the Mac version, only the Windows based version is available.

These entries must be entered, produced and printed out using MYOB.

Make sure you use MYOB. Students cannot use other packages like Microsoft EXCEL or Word or any other accounting package, otherwise a mark of zero out of six will automatically be imposed.

b. Adding Account Names to the Chart of Accounts

Please note that students are expected to add additional accounts in the MYOB data file provided on the AYB 339 Blackboard site, as several of your adjusting general journal entries will be made to these new accounts (eg. depreciation expense).

c. Dating your Adjusting General Journal Entries 30 June 2017

Please date all of your adjusting general journal entries 30 June 2017.

Please also include a brief narration of the adjustment in the memo field in MYOB.

d. Printing Adjusting General Journal Entries at 30 June 2017 in pdf format

Make sure that you only print out your adjusting journal entries and not all of the other journal entries already residing in the MYOB data file that has been provided to you.

Simply select the General Journal function and the date range: 30 June 2017 to 30 June 2017.

e. Accounting Depreciation Entries

For accounting purposes, each individual depreciable asset listed on pages 18 and 19 of this case study should be depreciated over their useful lives based on the following straight-line rates (in attached file) (rate shown in the final column).

There are a total of 11 individual assets (listed above).

However, instead of putting through 11 separate depreciation/amortisation journal entries, students are asked to only record five (5) journal entries in MYOB for each of the five classes of assets, namely:

• leasehold improvements (1 asset);
• property, plant and equipment (total of 7 assets);
• computer software (1 asset);
• liquor licence (1 asset); and
• leased motor vehicle (1 asset).

This means that you should enter five (5) depreciation/amortisation journal entries into MYOB.

For taxation purposes, being a small business entity (SBE), The Indian Odyssey Unit Trust will depreciate those eligible depreciating assets under Division 328 using the simplified depreciation regime (refer rules on page 27 of this case study).

f. Print out a Revised Profit and Loss Statement and Balance Sheet from MYOB in pdf format as at 30 June 2017

Finally, students are required to print out a revised Profit and Loss Statement and Balance Sheet from MYOB for The Indian Odyssey Unit Trust for the year ended 30 June 2017 in pdf format taking into account their adjusting general journal entries and include it as part of your overall submission.

In MYOB, your print range for the Profit and Loss Statement should be 1 July 2016 to 30 June 2017.

For the Balance Sheet, please print this report out as at 30 June 2017.

Please include cents when printing out both reports.

Failure to print out and include both your adjusted MYOB Profit and Loss Statement and Balance Sheet will automatically result in the loss of two (2) marks.

PART 2: Prepare the 2017 Annual Report for The Indian Odyssey Unit Trust in Microsoft Word

Students must use Microsoft Word to prepare the annual report. Students are not permitted to use any other electronic account preparation software packages (eg. Handisoft, Solution 6, MYOB Accountants Office etc).

When preparing the external financial statements, please round all figures from your MYOB management accounts to the nearest whole dollar. In other words, please do not include cents when preparing the external financial statements.

a. Students are required to prepare the Annual Report for The Indian Odyssey Unit Trust for the year ended 30 June 2017. The annual report should include the following documents (in the following order):

- the external financial statements excluding the Statement of Cash Flows, but including all of the notes to the accounts;

- the Trustee's Declaration;

- Minutes of Meeting of the Trustee showing the accounting distribution; and

- the Accountant's Compilation Report.

There is no need to prepare the financial statements for the corporate trustee, Indian Odyssey Pty Ltd, as the corporate trustee did not trade during the 2017 financial year.

For the Accountant's Compilation Report, please use the name of the firm that you created and used throughout the semester for your PBLs.

b. Which Accounting Standards Apply?

The Indian Odyssey Unit Trust is considered a non-reporting entity. Hence, only special purpose financial statements are required to be prepared.

However, please ensure that the external financial statements (and notes to the accounts) are prepared in accordance with the recognition, measurement and disclosure requirements of all of the AASB Accounting Standards with the exception of the following five (5) AASB Accounting Standards:

- AASB 8 Operating Segments;

- AASB 107 Statement of Cash Flows;

- AASB 112 Income Taxes; **

- AASB 124 Related Party Disclosures; and

- AASB 133 Earnings Per Share.

As the trust is not a separate legal entity for accounting and taxation purposes, no income tax accrues in the name of the trust. Hence, a trust does not have income tax expense (current or deferred). For this reason, AASB 112 has no application.

All other AASB Accounting Standards (including their recognition, measurement and disclosure requirements) must be complied with. This includes the current financial instruments suite of standards (ie. AASB 7, AASB 132 and AASB 139).

Please note that the unit trust has elected not to early adopt any new Accounting Standards (eg. AASB 9 Financial Instruments, AASB 15 Revenue from Contracts with Customers or AASB 16 Leases).

Furthermore, the unit trust is not eligible to apply the reduced disclosure requirements (RDR) contained in AASB 1053 Application of Tiers of Australian Accounting Standards as this standard only applies to reporting entities and The Indian Odyssey Unit Trust is not considered a reporting entity.

c. Income Statement

For the Income Statement, James and David have requested that you classify expenses by function instead of by nature.

Furthermore, James and David only want you to show those expenses on the face of the Income Statement that are specifically required to be disclosed under AASB 101 Presentation of Financial Statements.

d. Statement of Comprehensive Income

When preparing the external financial statements for The Indian Odyssey Unit Trust, please ensure that you prepare and include a Statement of Comprehensive Income in accordance with AASB 101 Presentation of Financial Statements.

e. Statement of Changes in Equity

For the Statement of Changes in Equity, please use the minimum disclosure requirements required under AASB 101 Presentation of Financial Statements.

f. Balance Sheet

For the Balance Sheet, please use the minimum disclosure requirements required under AASB 101.

g. "Real" and "Model" Financial Statements of a Unit Trust

Students are advised (and encouraged) to download the financial statements of a unit trust and review the content, structure and format of the financial report.

Even though many unit trusts prepare general purpose financial reports as distinct from special purpose financial statements, it will give students an excellent idea as to the layout, format, structure and content of a financial report.

Furthermore, some accounting firms have published model financial statements for unit trusts on their websites that students should consider referring to.

For example, a generic Google search on the term "model financial accounts Australia" will list several hyperlinks to range of accounting firms websites where these model financial statements can be downloaded in pdf format.

However, when preparing the external financial statements for The Indian Odyssey Unit Trust, please do not include the references to AASB paragraphs in the left-hand margin of the financial statements like the model sets of accounts do.

Finally, unit trusts (such as The Indian Odyssey Unit Trust) are not taxed. As such, no tax accrues in the name of the trust. Instead, the profits are distributed to the unitholders who include the distribution and pay tax on this in their name.

h. The Trustee's Declaration and Comparative Figures

The Trustee's Declaration should be dated 12 September 2017.

Comparative figures are not required in the financial statements, as the business only commenced trading on 1 August 2016.

The Minutes of Meeting of the Trustee showing the distribution of the accounting net profit (being 50% to each unitholder) should be dated 30 June 2017.

There is no cash distribution of the accounting profit, but rather a notional distribution to each unitholder.

PART 3: Prepare the 2017 Trust Income Tax Return and Tax Reconciliation for The Indian Odyssey Unit Trust

a. Students are required to prepare the trust's Income Tax Return & Tax Reconciliation for The Indian Odyssey Unit Trust for the year ended 30 June 2017

Students are required to prepare the 2017 trust income tax return of The Indian Odyssey Unit Trust. A blank copy of the 2017 trust tax return can be downloaded directly from the ATO website.

A blank copy of the tax return has also been placed on the AYB 339 Blackboard site.

The trust's tax file number (TFN) is: 767 912 607. The business and postal address of The Indian Odyssey Unit Trust is:

41 Bancroft Street Phone: (07) 3357 4015

Wilston, QLD, 4051. Facsimile: (07) 3357 4016

Do not complete the BSB and account details on the second page of the tax return.

For the purposes of the tax agent declaration (on the last page of the tax return), your tax agent reference number is: 57159-006. Please put your name and contact details in this box.

The income tax return should be dated 12 September 2017. It should be signed by James.

In terms of the trust distribution of the net income to each of the two unitholders (ie. Item 55 Statement of Distribution), please use the personal addresses for both James and David contained on page 19 of the business plan. The address can be used instead of providing the two tax file numbers of each family trust.

Students should also prepare the trust distribution minute (showing the 50% distribution of the net income of the trust estate - or tax profit - to each unitholder) for James and David to sign. Please date your trust distribution minute 30 June 2017.

Like the accounting distribution, there is no cash distribution of the tax profit, but rather a notional distribution to each unitholder. This tax distribution Minute should be included immediately after the last page of the tax return.

There is no need to prepare the income tax return for the corporate trustee, Indian Odyssey Pty Ltd as the corporate trustee did not trade during the 2017 financial year and derived no income whatsoever in its own name.

b. Students are required to prepare a One-Page Tax Reconciliation for The Indian Odyssey Unit Trust for the year ended 30 June 2017

James and David also ask you to prepare a one-page tax reconciliation. Students should start this reconciliation summary with the accounting net profit before income tax and then list all relevant adjustments to arrive at the trust's net income of the trust estate for the year ended 30 June 2017.

This one page reconciliation should be included immediately behind the last page of the trust's tax return. There is no need to prepare a deferred tax worksheet for this requirement.

Furthermore, when presenting your tax reconciliation, there is no need to refer or quote sections of the ITAA (1936), ITAA (1997), cases or taxation rulings.

Round all figures in the tax reconciliation to the nearest whole dollar.

PART 4: Professional Approach to Presentation

This assessment expects a professional approach to presentation similar to that expected in an Accounting firm when delivering documents to a client.

For this reason, you must satisfy the following professional presentation requirements or you will incur penalties as detailed in last section of the criteria sheet.

A professional approach also means that it is the responsibility of each student to ensure that the complete assignment is submitted by the due date and in the correct format (see below).

Once submitted, students are not able to attach or submit any additional documentation whatsoever as in a client situation, you would be unable to deliver additional information to a client and late information will be regarded as being late and may not be useful.

As students will be submitting all parts of the case study via QUT's Turnitin, students are asked to collate all of the various documents and save them into one pdf document to upload into Turnitin.

Please name your file "Your Student Name - Integrated Case Study.pdf".

Attachment:- Assignment File.rar