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Final Exam Sample Questions

ACC-ACF 2100

Semester 1, 2022

Question 1

At 30 June 2020, Harry Ltd has reported the following assets.

Both assets are measured using the cost model and depreciated on a straight-line basis over their expected useful lives.

On 31 December 2020, the company decided to change the basis of measuring the two assets from the cost model to the revaluation model. Machine was revalued to $250,000 with a new expected useful life of 10 years. Vehicle was revalued to $140,000 with a new expected useful life of 4 years.

On 30 June 2021, Machine was revalued to $145,000.

The tax rate is 30%.

Required:

Prepare the journal entries at 31 December 2020 and 30 June 2021 in relation to Machine and Vehicle.

Question 2

Gemma Ltd is a large manufacturing company. It operates through a number of cash-generating units (CGU).  At 30 June 2021, the carrying amounts of the assets of a CGU were as follows:

At 30 June 2021, Gemma Ltd conducted an impairment test of the CGU.  As part of that exercise, an independent valuer estimates the fair value less costs of disposal of the patent to be $2,430. Based on expert prediction on market conditions and the CGU’s past performance, the management concludes that the fair value of the CGU is $15,000. Costs directly associated with the CGU disposal is estimated at $3,000. Using a discount rate of 15% p.a., the present values of net cash inflows expected to be generated from the CGU is estimated to be $13,540.

The receivables held were all considered as collectable. The inventory was measured according to AASB 102 Inventories.

Required

Prepare the journal entries to account for any impairment loss at 30 June 2021.

Question 3

Barry Ltd acquired all the issued shares of Colin Ltd on 1 January 2022 for $288 000. At this date the equity of Colin Ltd consisted of:

All the identifiable assets and liabilities of Colin Ltd were recorded at amounts equal to their fair values except for:

Of the inventories on hand at 1 January 2022, 90% was sold by 30 June 2022. The remainder was all sold by 30 June 2023. The plant was considered to have a further 2-year life with benefits to be received equally in each of those years. The tax rate is 30%.

Required

Prepare the consolidated worksheet entries for the consolidated financial statements prepared by Barry Ltd at 30 June 2022, 30 June 2023.