bst answers required - BUACC2603 – Corporate AccountingSemester 2, 2012ASSIGNMENT Assessment weight:...

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bst answers required - BUACC2603 – Corporate AccountingSemester 2, 2012ASSIGNMENT Assessment weight: 25% Due Date: Week 10Length:1000 wordsGroup Assignment:2 peopleFormat: Part A - Report Part B - Consoli

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BUACC2603 – Corporate Accounting Semester 2, 2012 ASSIGNMENT Assessment weight: 25% Due Date: Week 10 Length:1000 words Group Assignment: 2 people Format: Part A - Report Part B - Consolidated worksheet and journals Part A – (15%) AASB 116 allows an entity to choose either the Cost Model or the Revaluation Model for valuation of an entire class of assets (paragraph 29). The Chief Executive Officer (CEO) of your company (a medium sized listed, limited company in Australia) has asked you and your colleague to prepare a report for the Board of Directors of the company, explaining the features of the two options, comparing these and coming up with your recommendations for adoption of one of these models for subsequent recognition of its Plant & Machinery, and Land & Buildings. Required: Prepare a report for the Board, not exceeding 1000 words, on the two models, strictly following the University’s policies on referencing and plagiarism. Assessment criteria 1000 words max.Excellent (HD)Very Good (D)Good (C)Satisfactory (P)Unsatisfactory (F)1. Introduction (10)2. Body/Discussion (30) Critical evaluation of topic3. Recommendation/s (10) Conclusion (5)4. Examples (10)6. Referencing, citations (5)7. Evidence of reading, quality and quantity (10)8. English expression, coherence, grammar and spelling. Logical flow of ideas (10) 90/6 = 15% Part B – 10% On 1 July 2008, Melbourne Ltd acquired all the share capital of Sydney Ltd for $472,000. At that date, Sydney Ltd.’s equity consisted of the following: Share capital$ 300,000 General reserve 96,000 Retained earnings 56,000 At 1 July, all the identifiable assets and liabilities of Sydney Ltd were recorded at fair value. Financial information for Melbourne Ltd and Sydney Ltd for the year ended 30 June 2012 is presented in the left-hand columns of the worksheet. It is assumed that both companies use the...

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David · Accepted Answer

Part – A 
AASB 116 allows an entity to choose either the Cost Model or the Revaluation Model for 
valuation of an entire class of assets (paragraph 29).  
The Chief Executive Officer (CEO) of your company (a medium sized listed, a limited company 
in Australia) has asked you and your colleague to prepare a report for the Board of Directors of 
the company, explaining the features of the two options, comparing these and coming up with 
your recommendations for adoption of one of these models for subsequent recognition of its 
Plant &Machinery, and Land & Buildings. 
Required: 
Prepare a report for the Board, not exceeding 1000 words, on the two models, strictly following the 
University’s policies on referencing and plagiarism.  
Answer  
Let us assume that the company “Queen Ltd” is engaged in manufacturing of medical equipments and 
its exports its products in United States of America, Mexico, China and other developed economies 
apart from supplying to the local Australian market. The company is very well in expansion mode as 
it has established itself in the market. Being a manufacture, the company has invested 80% of its total 
assets invested in Property, Plant and Equipments. As fixed assets like PPE has major contribution, 
the company is in dilemma of adopting any one of the Methods - Cost Method or Revaluation Method 
towards valuing the fixed assets (PPE) of the company. As per AASB 116, an item pertained to PPE 
that is eligible to qualify as asset recognition is measured at its cost initially. The assets which are 
being acquired , cost element includes purchase price, direct costs attributable  to bringing  the asset to 
the location and cost of putting the asset for use along with site restoration cost and cost incurred for 
dismantling the asset.  
As per the Australian Accounting Standard Board 116, the company may adopt any of the Methods –
Cost Methods or Revaluation Methods to value PPE.  
Cost Model – As per this model,

bst answers required - BUACC2603 – Corporate AccountingSemester 2, 2012ASSIGNMENT Assessment weight: XXXXXXXXXX25% Due Date: Week 10Length:1000 wordsGroup Assignment:2 peopleFormat: Part A - Report...

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