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https://elearning.kbs.edu.au/pluginfile.php/779009/mod_resource/content/15/ACCM4300%20T1%202022%20A3%20Assessment%20Information Page 1 Kaplan Business School Assessment 3 Outline Assessment 3 Information Subject Code: ACCM4300 Subject Name: Financial Reporting Assessment Title: Assessment 3 Assessment Type: Statement of Advice - Individual Assignment Word Count 2,000 words (+/- 10%) Weighting: 40 % Total Marks: 40 Submission: Via Turnitin-written report Due Date: Tuesday of Week 13 at 19:55 (AEST) Your Task You are required to prepare a statement of advice to answer all of the following questions listed on pages 2-3 of this document. Assessment Description Assume that you are a team of graduate accountants working for BluePrint Pty Ltd, a public accounting firm situated at 297 York Street, Sydney, NSW 2000. The Manager of your firm, Mr. Aaron Mazars has asked you to prepare a statement of advice in response to various emails received from clients raising several accounting issues. Please see the issues on the next page. The maximum length for the statement of advice is 2,000 words. You should address all the technical issues and discussion in your advice, followed by a Reference List. Part A: Technical component 30% - This mark covers the technical content of your advice and the explanation of each of the issues, the calculations, journal entries (where applicable) and the sources used. Part B: Communication Skills (Writing Skills) 10% - This mark covers the generic skills of writing; clear meaning, structure and organisation, appropriate tone and grammar, spelling, and punctuation, etc., throughout the whole assignment. Page 2 Kaplan Business School Assessment 3 Outline Case Study (Issues identified from three clients) You are an assistant accountant for BluePrint Pty Ltd, Public Accounting firm. Your manager Aaron asked you to draft a statement of advice for the following three clients regarding their concerns listed below. Client 1 (Max Hills Ltd) Re. Recognition of assets and liabilities in business combination Max Hills Ltd recently purchased 100% of issued shares in Mini Ltd. The directors of Max Hills Ltd discovered the following items were not recognised in Mini Ltd of acquisition. Intangible assets a) a household brand name which the market has valued at $10 million; b) a customer list consisting of information about customers, such as their name, personal preferences, order or product backlog and contact information, which is estimated to have a fair value of $5 million; and c) a good customer relationship (customer contracts and related customer relationship) which is highly valued by Subsidiary Ltd, but which is estimated to have a fair value of only $1 million once the ownership and management of Subsidiary Ltd is changed through the acquisition. Contingent liabilities a) a contingent liability involving a claim for infringement of copyright, which the lawyers are of the opinion that there is a 60% chance that Mini Ltd will have to pay nothing, a 20% chance that it has to pay $100,000 and another 20% chance that it has to pay $500,000; and b) a contingent liability involving a possible payment of $1 million compensation to the CEO of Mini Ltd in the event that the CEO is dismissed within 3 years for not meeting the profit targets. Provide advice to the managing director of Max Hills Ltd, with relevant references to the Australian Accounting standards in your answer. Client 2 (MCL Ltd) Re. Intra group entries MCL Ltd is a wholesaler of chemicals and a distributor. On 1 July 2021, MCL acquired all the equity in Bulldog Ltd, a company incorporated in Israel for AUD $1,550,000. At that date, the equity of Bulldog Ltd consisted of share capital ILS 4,800,000 and retained earnings ILS 800,000. (Note: ILS = Israeli New Shekel, Israeli currency) At the date of acquisition, all of the assets and liabilities were valued at fair value except for land, which was undervalued by ILS 600,000 (carrying amount was ILS 2,800,000) The exchange rates for the reporting period ending 30 June 2022 are shown below. 1 July 2021 AUD $1 = ILS 4 Average rate for the year AUD $1 = ILS 4.80 30 June 2022 AUD $1 = ILS 5 Page 3 Kaplan Business School Assessment 3 Outline is the Australian dollar. The tax rate in Australia is 30 per cent, while the tax rate in Israel is 40 per cent. The directors of MCL need your help to prepare consolidation worksheet entries as at 1 July 2021 and 30 June 2022. Provide advice to the managing director of MCL Ltd, with relevant references to the Australian Accounting standards in your answer. Client 3 (BKL Group Ltd) Re. Presentation/Disclosure of Non-controlling interest BKL Ltd is preparing its consolidated financial statements for the year ended 30 June 2021. The directors are wondering how non-controlling interest will be disclosed in their consolidated financial reports. On 1 July 2020, BKL Ltd purchased 70% of the shares of Subsidiary Ltd for $160,000. At the acquisition date, Subsidiary Ltd had issued capital of $100,000 and retained earnings of $100,000. Note: Goodwill was calculated as $20,000 using a full goodwill method. During 2020/21 financial year, BKL Ltd and Subsidiary Ltd recorded profits of $100,000 and $50,000 respectively. BKL Ltd sold inventory with a cost of $5,000 to Subsidiary for $$9,000. 80% of this inventory was still on hand of Subsidiary on 30 June 2021. Subsidiary Ltd adapted a fair valuation method and increased its Land value by $15,000. On 30 June 2021, both BKL Ltd and Subsidiary Ltd declared dividend of $10,000. The directors at BKL asked for your help with completing the consolidated financial statements. How should non-controlling interest be recorded on financial statements? Help the director to identify all affected financial statements and sections of the financial statements with non-controlling interest amounts. Provide advice to the director, with relevant references to the Australian Accounting standards in your answer. Page 4 Kaplan Business School Assessment 3 Outline Assessment Instructions The assignment will need to be submitted electronically through the student portal use the link under Referencing Any sources that you use need to be acknowledged in order to avoid plagiarism. Information on referencing can be found in the Guidelines for Referencing and Presentation at the Kaplan website using the following address: (https://elearning.kbs.edu.au/mod/page/view.php?id=128881). In-Text Referencing and the Reference List Sources of information must be cited both in the body of the text (in-text referencing) and the end of the assignment (reference list). Failure to do so will result in penalties. Remember that when referencing an Annual Report, it is a corporate document that does not have a particular author but it will still require referencing any time you use information from it. Any other documents or books or other references you use will also require referencing. Please note Any work which has been copied or shared between students will result in a Fail grade for all students concerned. Therefore, please make sure that the answer to this assignment is your work and not copied or bought from any source. In completing this assignment make sure you follow the guidelines for assignments especially those relating to the presentation of written work, late assignment policy and academic integrity. Page 5 Kaplan Business School Assessment 3 Outline Important Study Information Academic Integrity Policy KBS values academic integrity. All students must understand the meaning and consequences of cheating, plagiarism and other academic offences under the Academic Integrity and Conduct Policy. What is academic integrity and misconduct? What are the penalties for academic misconduct? What are the late penalties? How can I appeal my grade? Click here for answers to these questions: http://www.kbs.edu.au/current-students/student- policies/. Word Limits for Written Assessments Submissions that exceed the word limit by more than 10% will cease to be marked from the point at which that limit is exceeded. Study Assistance Students may seek study assistance from their local Academic Learning Advisor or refer to the resources on the MyKBS Academic Success Centre page. Click here for this information. http://www.kbs.edu.au/current-students/student-policies/ http://www.kbs.edu.au/current-students/student-policies/ https://elearning.kbs.edu.au/course/view.php?id=1481 A ss es sm en t 3 P ar t A - A ss ig nm en t R ub ri cs : 3 0% T ec hn ic al C on te nt H ig h D is ti n c ti o n 8 5 1 0 0 % (M a rk s 2 5 .5 t o 3 0 .0 ) D is ti n c ti o n 7 5 - 8 4 % (M a rk s 2 2 .5 t o 2 5 .4 ) C re d it 6 5 7 4 % (M a rk s 1 9 .5 t o 2 2 .4 ) P a s s 5 0 6 4 % (M a rk s 1 5 t o 1 9 .4 ) F a il s 0 4 9 % (M a rk s 0 t o 1 4 .9 ) M a rk A w a rd e d T e c h n ic a l C o n te n t S ta te m e n t o f A d v ic e f o r a ll t h re e c li e n ts c le a rl y id e n ti fi e s a n d a d d re