1. Attached is both the assignment and the example provided from the previous semester with key information and the solutions. Can you please provide working out on how they arrived at the numbers and the journal entries for the example I have provided.
2. For the assignment, please show all working out and how you arrived at the number you calculated and how you arrived at the journal entry you used.
3. The example provided can be used as a guide but I need justification and evidence of working for both
Thanks
1 ACCOUNTING METHOD II EQUITY ASSIGNMENT PART B STAGE 1 Due date/time Friday 5th October 2018 11:00pm PRIMARY INFORMATION ( Previously provided) Tele Strata Ltd (TSL) is an ASX listed company which provides fibre to the home broadband connectivity for telecommunication services. The company has always been at the forefront of telecommunications development and, as a result, has been very successful. TSL has a strong record of rewarding its shareholders. The equity section of its Balance Sheet as at 30th June 20X6 presents as follows: EQUITY $ 000s Share Capital Ordinary shares paid to $4.50 40,320 7.5% pa $10.00 Preference shares 50,000 Reserves General Reserve 9,576 Foreign exchange translation 8,545 Retained Profits 11,872 TOTAL EQUITY 120,313 NB All Ordinary shares were issued to $4.50. Share issue costs of $1,800,000 have been offset against the Ordinary share capital. The Preference shares are non-participating and dividends on those are paid every quarter on the last day of August, November, February and May. 2 TSL pays Ordinary share dividends twice a year (ie an interim and final dividend) and also offers its shareholders regular non-renounceable share rights issues. On the 15th December 20X5 TSL offered a Dividend Reinvestment Plan for its Ordinary shareholders. The plan is effective on any Ordinary share dividends paid after the 1st January 20X6 and 50% of ordinary shareholders accepted the offer. Shareholders are issued with fully paid shares based on the value of the ASX share price on the day of the dividend declaration. The following are the ASX closing share prices for TSL on the dates provided. Date Closing Share Price $ Date Closing Share Price $ 1/7/X5 2.12 21/1/X6 2.62 31/8/X5 2.24 31/1/X6 2.89 12/9/X5 2.26 15/2/X6 3.90 21/9/X5 2.40 28/2/X6 3.95 1/10/X5 2.34 3/3/X6 3.88 10/10/X5 2.34 15/3/X6 4.00 2/11/X5 2.32 1/4/X6 4.01 15/11/X5 2.33 16/4/X6 3.97 30/11/X5 2.40 30/4/X6 4.10 24/12/X5 2.60 10/5/X6 4.12 2/1/X6 2.61 31/5/X6 4.23 3 STAGE 1 JOURNAL ENTRIES 15 marks There are two series of transactions detailed below which need attention in addition to the primary information provided. 1. In the Balance Sheet of TSL at 30/6/X6 there was provision for the payment of a dividend of 8 cents/share on the Ordinary shares. The declaration of dividend date was 30th June 20X6 and it was paid on the 10th September 20X6. 2. On 21st September 20X6 the Company Board announced an offer to Ordinary shareholders of a non-renounceable share rights issue of 1 share for every 12 held. The rights shares can be taken up at 90% of the ASX share price on the day of the announcement of the issue. The offer closed on 16th October 20X6. 50% of the shareholders took up the offer and money was received on 2nd November 20X6. REQUIRED From the primary information together with the information provided above record the general journal entries for all transactions for the period 1st July 20X6 to 30th November 20X6. If necessary round numbers to the nearest whole dollar or the nearest number of whole shares. In addition to share prices previously supplied you also have the following information. Date Closing Share Price $ Date Closing Share Price $ 15/6/X6 $4.10 24/12/X6 $3.00 30/6/X6 $4.00 2/1/X7 $2.85 15/7/X6 $3.92 15/1/X7 $2.90 31/7/X6 $3.86 6/2/X7 $2.87 12/8/X6 $3.85 28/2/X7 $2.95 10/9/X6 $3.45 15/3/X7 $3.00 21/9/X6 $3.60 1/4/X7 $3.10 16/10/X6 $3.36 15/4/X7 $3.09 23/10/X6 $3.28 30/4/X7 $3.14 2/11/X6 $3.19 18/5/X7 $3.17 30/11/X6 $3.15 31/5/X7 $3.28 1 ACCOUNTING METHOD II EQUITY ASSIGNMENT PART B Part B of the assignment comprises one question but is delivered in three different stages. The question relates to share dividends and non-renounceable share rights issues. Not all of these areas have been covered in the Equity topic in Accounting Method II. To assist you, though, the materials are covered in the textbook for the course. The question presented here deals with general journal entries in three different stages. The reason for the different stages is to allow students to undertake a stage and then get the suggested solutions to that before moving onto the next stage. The relevant due dates are as follows: Stage Details released Due date/time 1 Monday 7TH May 2018 7:00am Friday 11th May 2018 11:00pm 2 Monday 14th May 2018 7:00am Friday 18th May 2018 11:00pm 3 Monday 21st May 2018 7:00am Friday 25th May 2018 11:00pm The solution for each stage will be available the day after the due date/time. As a result, unless there are extraordinary circumstances, a non-submission will receive zero marks for that stage. Students are advised to submit their assignment in MyUni in advance of the due time/date to ensure that they do not encounter any submission problems. Your assignment has to be submitted in a pdf file. Therefore, ensure that you are able to convert your files into pdf. Please start each question on a new page. Your assignment must be typed using suitable software (eg Microsoft Word). It is always important that the presentation of any work for someone else to read and interpret is of a professional standard. As a result ensure that your assignment is well formatted, easy to follow and is readable (including English and grammar). The question requires students to present general journal entries and it is strongly recommended that you don’t copy/paste any templates but construct your own. While there are no marks awarded for presentation, up to 5 marks can be deducted if the assignment does not meet these criteria. Areas of particular concern are: Ensure that the whole journal entry is on one page and is not spilt across two pages. That large numbers use either commas (eg $5,987,454) or spaces (eg $5 987 454). Leaving a space between journal entries. 2 This Assignment must be your own work. Students are reminded of the various University plagiarism policies and any occurrences of plagiarism will be dealt with accordingly. Group assignments are not permitted. This Assignment will be marked out of 25 marks (prior to the deduction of any presentation marks) and this represents 5% of the overall assessment in the course Accounting Method II. 3 ASSIGNMENT PART B QUESTION TOTAL OF ALL STAGES 25 MARKS PRIMARY INFORMATION Probio Agric Ltd (PAL) is an ASX listed company which researches and develops drought resistant grains for use in arid areas of the world. The company is very successful and has a strong track record of rewarding its shareholders. The equity section of its Balance Sheet of PAL as at 30th June 20X4 presents as follows: EQUITY $ 000s Share Capital Ordinary shares paid to $3.00 23,046 6% $15.00 Preference shares 6,750 Reserves General Reserve 1,211 Foreign exchange translation 2,100 Retained Profits 6,431 TOTAL EQUITY 39,538 Share issue costs of $3,000,000 have been offset against the Ordinary share capital. The Preference shares are non-participating and dividends on those are paid every quarter on the last day of September, December, March and June. PAL pays Ordinary share dividends twice a year (ie an interim and final dividend) and also offers its shareholders regular non-renounceable share rights issues. On the 15th November 20X4 PAL offered a Dividend Reinvestment Plan for its Ordinary shareholders. The plan is effective on any Ordinary share dividends paid after the 1st January 20X5 and 80% of ordinary shareholders accepted the offer. Shareholders are issued with fully paid shares. The following are the ASX closing share prices for PAL on the dates provided. Date Closing Share Price $ Date Closing Share Price $ 1/7/X4 2.76 31/10/X4 3.06 31/7/X4 3.16 31/12/X4 3.38 15/8/X4 3.34 31/1/X5 3.41 1/9/X4 3.27 28/2/X5 3.75 15/9/X4 3.25 14/3/X5 3.84 30/9/X4 3.12 31/3/X5 3.89 15/10/X4 3.24 15/4/X5 3.90 1 ACCOUNTING METHOD II EQUITY ASSIGNMENT PART B STAGE 1 JOURNAL ENTRIES 8 marks There are two series of transactions detailed below which need attention in addition to the primary information provided. 1. In the Balance Sheet of PAL at 30/6/X4 there was provision for the payment of a dividend of 15 cents/share on the Ordinary shares. This was paid on the 30th September 20X4. 2. On 1st September 20X4 the Company Board decided to offer to Ordinary shareholders a non-renounceable share rights issue of 1 share for every 10 held. The rights shares can be taken up at 95% of the ASX share price on the day of the announcement of the issue. On the 15th September the announcement was made and monies received on the 15th October 20X4 from 75% of shareholder who accepted the offer. REQUIRED From the primary information together with the information provided above record the general journal entries for all transactions for the period 1st July 20X4 to 31st October 20X4. SOLUTION A Provision for Dividend account FOR THE Ordinary shares would have been created in the Balance Sheet at 30/6/20X4. The number of shares is ($23,046,000 + $3,000,000)/$3.00. The amount would have been 8,682,000*$0.15. Date Particulars DR CR 20X4 Preference Share dividend 101,250 Sept 30 Provision for Dividend 1,302,300 Cash at Bank 1,403,550 (Pay pref. dividend for 3 months ($6,750,000*6%*/4) and the provision account for ordinary share dividends) Date Particulars DR CR Oct 15 Cash at Bank 2,010,426 Ordinary Share Capital 2,010,426 (Cash received on non-renounceable ordinary share rights issues being 8,682,000/10*75%*$3.25*95%)