ACC210 Assignment Financial Accounting代写

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ACC210 Assignment Financial Accounting

Due Date: Monday 10 October 2016 at 12 midnight

Word count: approx 1,500 words

Weighting: 30%

The assignment requires you to prepare answers to the following 4 questions. The

assignment must be your own individual work, i.e. it is not a group assignment. If it

is believed that a student has copied material from another student or any other

source without appropriate referencing, the necessary action will be taken under the

University’s Student Academic Integrity - Governing Policy:

(http://www.usc.edu.au/explore/policies-and-procedures/student-academic-integrity-

governing-policy). Therefore, it is critical that you provide complete referencing for

any and all sources of information that you use in preparing your assignment. This

includes both in-text references and a list of references at the end of your

assignment. Please contact your local campus lecturer/tutor if you have any queries

about referencing. Alternatively, you can post your query to the Discussion Board on

the course Blackboard site.

Other general points about the assignment:

 The assignment should only be submitted electronically via Safe Assignment

on the ACC210 Blackboard site. If you wish to apply for an extension to your

submission date, please email Peter Baxter (pbaxter@usc.edu.au) to explain

the circumstances and attach any necessary supporting documentation.

 Late penalties will be applied for assignments submitted after 12 midnight on

Monday 10 October without an approved extension. More details on late

penalties are provided in the course outline.

 It is not necessary to include an overall introduction and conclusion for the

assignment.

 The suggested word count for each of the 4 questions provides you with a

guide to the approximate number of words that you should use in answering

each question. The suggested total word count is approximately 1,500 words.

But if your word count is above 1,800 words, we will not continue marking

your assignment after reading that number of words.

ACC210 Assignment Financial Accounting代写

Question 1: (Approximately 400 words)

Queenslander Ltd operates a café and gift shop at Montville in the Sunshine Coast

hinterland. You are the accountant for the company and the following items relate to

the year ended 30 June 2016:

(a) Queenslander Ltd is the guarantor for an employee's bank loan. As the

employee is in serious financial difficulties, you think it likely that he will default

on the loan.

(b) As a gift from a very grateful and generous customer, Queenslander Ltd

receives 500 shares in Walters Ltd which are currently trading at $2 per share.

Coast hinterland from the windows of the café attracts a large number of

customers.

Required:

Explain how Queenslander Ltd should account for each of the above items. You

should justify your answer by reference to the AASB conceptual framework's

definitions and recognition criteria for assets, liabilities, income and/or expenses.

Question 2: (Approximately 350 words)

One of the directors on the board of directors of Manly Ltd has proposed that the

company adopt the revaluation model for the measurement of its machinery. Some of

this machinery is difficult to replace because of its unique nature and certain items of

machinery have increased in value in the current period. The director is arguing that,

as there has been no decline in the machinery’s fair value, no depreciation expense

should be recognised on these items of machinery.

ACC210 Assignment Financial Accounting代写

Explain whether the director's proposal (about not recognising depreciation) should be

adopted by the board.

Question 3: (Approximately 400 words)

Sharks Ltd is an Australian mail-order company that sells a variety of homeware

products. Although the online homeware products industry in Australia is growing

slowly, Sharks Ltd has reported significant increases in sales and net profits in

recent years. While sales increased from $50 million in 2009 to $120 million in 2015,

net profit increased from $3 million to $12 million over the same period. The stock

market and analysts believe that the company's future is very promising. In early

2016, the company had a market capitalisation of $350 million, which was

approximately three times the 2015 sales and around 26 times estimated 2016 profit.

The company’s management and many investors attribute the company's success to

its marketing flair and expertise. Instead of competing on price, Sharks Ltd prefers to

focus on service and innovation, including:

• free delivery across Australia; and

• a free gift with orders over $200.

As a result of such innovations, the company’s customers are willing to pay prices

that are 60% above those of competitors, and Sharks Ltd maintains a gross profit

margin of around 40%.

Nevertheless, some investors have doubts about the company as they are uneasy

about certain accounting policies the company has adopted. For example, Sharks

Ltd capitalises as a non-current asset the costs of its direct mailings to prospective

customers of catalogues advertising the company’s products ($4.2 million at 30 June

2015) and amortises them on a straight-line basis over 3 years. The mailing lists

have been developed by the company’s in-house marketing staff. This accounting

practice is considered by some investors to be questionable as there is no guarantee

that customers will be obtained and retained from direct mailings.

In addition to the company’s in-house developed direct mailing lists, Sharks Ltd

purchased a customer list from a competitor for $800,000 on 4 July 2016. This list is

also recognised as a non-current asset. Sharks Ltd estimates that this list will

generate sales for at least another 2 years. The company also plans to add names,

obtained from a phone survey conducted in August 2016, to the list. These extra

names are expected to extend the list's useful life by 1 more year.

Sharks Ltd's 2015 statement of financial position also reported $7.5 million of

marketing costs as non-current assets. If the company had expensed marketing

costs as incurred, 2015 net profit would have been $10 million instead of the

reported $12 million as $2 million was spent on marketing activities in the 2015

financial year. The concerned investors are uneasy about this capitalisation of

marketing costs, as they believe that Sharks Ltd's marketing practices are relatively

easy to replicate. However, Sharks Ltd argues that its accounting is appropriate.

Marketing costs are amortised at an accelerated rate (55% in year 1, 29% in year 2,

and 16% in year 3), based on the company’s 25 years' knowledge and experience of

customer purchasing behaviour.

Required:

Explain how Sharks Ltd's costs (costs of direct mailings, purchased customer list and

marketing costs) should be accounted for under AASB 138/IAS 38 Intangible Assets,

giving reasons for your answers.

Question 4: (Approximately 350 words)

Bird Ltd, a listed company, provides food to function centres that host events such as

weddings and engagement parties. After an engagement party held by one of Bird

Ltd's customers in June 2017, 100 people became seriously ill, possibly as a result

of food poisoning from products sold by Bird Ltd. Legal proceedings were

commenced by legal representatives of the people seeking damages from Bird Ltd,

which disputed liability by claiming that the function centre was at fault for handling

the food incorrectly. Up to the date of authorisation for issue of the financial

statements for the year to 30 June 2017, Bird Ltd's lawyers advised that it was

probable that Bird Ltd would not be found liable. However, two weeks after the

financial statements were published and released to shareholders, Bird Ltd's lawyers

advised that, owing to developments in the case, it was probable that Bird Ltd would

be found liable and the estimated damages would be material to the company's

reported profits.

Required:
ACC210 Assignment Financial Accounting代写

Explain whether Bird Ltd should recognise a liability for legal damages in its financial

statements as at 30 June 2017? How should it deal with the information it receives

two weeks after the financial statements are published? You should refer to relevant

parts of the AASB conceptual framework and AASB accounting standards in your

answer.

Assessment criteria:

The assignment will be marked according to the following assessment criteria:

 logical application of concepts to situations, with adequate justification for

choices made

 professional presentation, including correct use of spelling, grammar and

Harvard referencing.
ACC210 Assignment Financial Accounting代写