ACCT6005 Company Accounting Report Sample

ACCT6005 Company Accounting

Context:

This assignment will cover the learning objectives from: Module 2 Intra-group transactions.
You will be required to prepare a short video (5 minutes +/- 10%) addressing the specific questions provided in this assignment. This is designed to access your understanding of the concepts covered in Module 2 and also demonstrate your communication skills to your audience. Please ensure that your presentation includes reference to relevant Australian Accounting Standards (AASB).

Instructions:

1. Prepare a video presentation to answer the questions in this assignment. Upload your file on Blackboard by reading the instructions contained in the following link: https://laureate-
au.blackboard.com/webapps/blackboard/content/listContentEditable.jsp?content_id=_3876 29_1&course_id=_4044_1

2. Prepare and upload your script for your presentation as a word file with a safe assign check.

Case study

Video Presentation

Technical accuracy of your presentation 12 marks

Presentation skills (Refer Rubric) 3 marks

Prepare a video presentation to address each issue. You will be assessed on your technical understanding of each question and also your presentation skills. Please refer to the marking rubric which details the assessment criteria for the communication and presentation skills.
You may use visual aids to support your presentation, however you must be seen at all times in front of the camera. Marks will not be awarded if you read directly from your notes. Headphones are strictly prohibited and will attract a zero grade. Please introduce yourself and the purpose of your presentation. Speak slowly and clearly to address each issue in the case study.

Assessment 2

Introduction

The Australian Accounting Standard Board 3 ensures that the retained earnings are adjusted and entered into the consolidated financial statement (Assets, 2022). Australian Accounting Standard Board (AASB) 10 serves as the standard for preparing the close financial information for the company. According to the MBA Assignment Experts overview, The accounting standard helps identify the relevant activities that can affect the return earned by the company. Activities can include selling or purchasing assets/ goods for the company (Australian Government, 2020). In addition, the entity must eliminate the unrealised profit transactions entered by its subsidiary companies. This will help get the actual profit and reduce overemphasis of income in the financial year. 

Entry 1: Solution

Inventory of $200000 has been entered in the books of the subsidiary company account rather than in the parent company's books of account. Rectification of this entry is required to analyse the actual value in the parent company's financial statement. According to AASB 10, the parent company must prepare the consolidated financial information to consider the parent and the subsidiary company transactions. Plant value on being credited decreases the value while preparing the consolidated financial statement. Further, the inventory account increases as the value are debited to organise the parent company's financial information. The sale of plant $180,000 reduces the profit as the transaction is debited for adjusting the consolidated financial statement of the parent company. 

Entry 2: Solution

Adjustment for Depreciation

Depreciation is the method of allocating the cost of the plant/asset to its serviceable life. The depreciation must be adjusted while preparing the consolidated financial statements for the parent company. The provision decreases for the company as the accumulated depreciation is debited as the financial statements are prepared—return on earnings of $25,000 on being adjusted increases the profitability of the parent company. AASB 10 indicates the company to change the return from gains while preparing the consolidated financial statement. Further, the depreciation account is decreased by $50,000 while adjusting the entries for the parent company. 

Adjustment for Tax

The previous entry of depreciation has impacted the tax for the parent company. Income tax expense of $ 15,000 debited in the threshold increases the company's income tax expense. Further, the retained earnings of $7,500 decrease the amount when preparing the company's finances. The above entries affect the deferred tax asset of the company. An amount of $22,500 is credited in the deferred tax assets, which reduce the final amount in the company's consolidated financial statement. Tax accounts should be adjusted with the depreciation entry, and separate entries need not be made to accommodate the tax amount for the company. 

Entry 3: Solution

The cost of sales amounting to $120,000 is adjusted with the parent company's sales. $84,000 of the retained earnings is debited to balance the consolidated financial statement. Further, an amount of $36000 increases the income tax expense for the company. AASB 3 ensures that the retained earnings must be recognised while preparing the consolidated financial statement for the parent company (Assets, 2022). Therefore, the changes in the retained earnings of $84,000 and tax expenses of $36,000 must be of the company must be included in the financial statement. 

Conclusion

According to AASB 3 and AASB 10, the journal entries must be adjusted while preparing the consolidated financial statement of the parent company. Accordingly, the sale of plants of the subsidiary company should be changed in the financial information, and thus the amount has been debited. Similarly, the adjustment for depreciation has been made while preparing the consolidated financial statement for the group. 

References

Assets (2022). [online] Available at: https://assets.ey.com/content/dam/ey-sites/ey-com/en_au/pdfs/ey-new-au-acctg-pronouncements-as-of-30062020.pdf  [Accessed 22 March 2022].

Australian Government. (2020). [online] Available at: [Accessed 22 March 2022].