2103AFE Company Accounting 1 2103AFE Company Accounting Group Assignment (20%) Words count: maximum 2,000 words Trimester 2, 2018 This assignment requires students to work in groups of two to four...

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2103AFE Company Accounting 1 2103AFE Company Accounting Group Assignment (20%) Words count: maximum 2,000 words Trimester 2, 2018 This assignment requires students to work in groups of two to four people and produce a single report for each group. DUE DATES: Closing date for joining a group: 17:00 (5pm) 14th September 2018 Group Assignment Submission: 17:00 (5pm) 21st September 2018 SPARKplus ratings: From 22nd September to 30 September 2018 by 5pm TOTAL WEIGHTING Part A - Group Work 10% (total marks: 50) Part B – Self & Peer Assessment 10% (Calculated for each individual student using SPARKplus, therefore each group member may receive a different mark in Part B) Part A – Group Work (10%): The aim of Part A is to apply the knowledge and understanding of Topics 1 to 4 from lectures and workshops in a practical and detailed manner. The assignment is to be completed in groups of two to four. Students will sign up in a group on Learning@Griffith from Week 4. Each group has been allocated an ASX Company on which to prepare this assessment. Part B – Self & Peer Assessment (10%). This assignment involves the completion of Self and Peer Assessment Ratings and feedback using SPARKplus. All information pertaining to SPARKplus is located in the Learning@Griffith course site under Assessment>>SPARKplus Student Resources. Please see the attached SPARKplus rubric for Part B that shows you how the ratings will be applied. Students who do not rate to their peers (group members) will receive 0% in the Part B. REQUIREMENTS: 1. Each group requires to prepare a single report by answering all of the questions (question 1 to 4) related to the company that is assigned to your group. The following table shows the groups number and the corresponding ASX Company assigned to these groups. Groups number Assigned company Campuses Group 01 – group 08 CBA Annual Report 2017 Nathan and Gold Coast Group 09 – group 16 Telstra Annual Report 2017 Nathan and Gold Coast Group 17 – group 25 Wesfarmers Annual Report 2017 Nathan and Gold Coast Group 26 – group 33 Woolworths group Annual Report 2017 Nathan and Gold Coast Group 34 – group 41 CBA Annual Report 2017 Nathan and Gold Coast Group 42 – group 50 Telstra Annual Report 2017 Nathan and Gold Coast Group 51 – group 58 Wesfarmers Annual Report 2017 Nathan and Gold Coast Group 59 – group 66 Woolworths group Annual Report 2017 Nathan and Gold Coast 2 2. Students are required to complete the Assignment in a group of two, three or four members. Group members are to sign up at learning@Griffith from Week 4 – an announcement with instructions will be provided. 3. Students must use the ASX Company assigned to their group – no exceptions or variations will be approved. 4. Students must use their own words to answer all the questions. In other words, copying directly from the company’s annual report is strictly prohibited. 5. All answers must use proper English expressions and grammar, and be within the total word count. 6. The group assignment must be properly referenced, with a list of references provided at the end of the assignment. 7. Students must complete the Self & Peer Assessment Resource Kit (SPARKplus) Ratings of the group. Final ratings must be completed by the due date shown above, i.e 30 September 2018 by 5 PM or 0% will be awarded for the assessment in Part B. 8. The assignment is to be submitted online by the due date. SUBMISSION: 1. Detailed instructions on how to submit the assignment is available in the Course Home Tab/Assignment Submission on Learning@Griffith. 2. The assignment must be word-processed using Microsoft Word, Times New Roman, 12 point font, double-spaced. 3. Only one group assignment is to be submitted by the group (please appoint a group leader and he/she will submit the assignment on behalf of the group). 4. Each group member must complete an Academic Integrity Declaration. 5. Marks may be deducted if any of the requirements (1-8) or submission instructions (1-4) are not complied with. Question 1: Accounting for Income Tax (suggested words count: approximately 300) 10 Marks Please refer to the annual report of the ASX Company that has been allocated to your group. Based on the annual report and the relevant notes, answer the following: (a) What is the income tax expense included in the Income Statement? 1 marks (b) How/where does the Company recognise income tax expense? 2 marks (c) Identify two items to which the temporary differences in your company’s report can be attributed. 2 marks (d) What is the amount of income tax paid during the year? 1 marks (e) Show any deferred tax asset or deferred tax liability (or both) disclosed in the statement of financial position, including the amount of these balances. 2 marks (f) Explain why the current tax liability at the end of the reporting period may not equal the income tax expense for the period. Make reference to the amounts used in your Company’s annual report. 2 marks 3 Question 2: Translation of Foreign Operations (suggested words count: approximately 200 words) 20 marks Please refer to the annual report of the ASX Company that has been allocated to your group. Based on the annual report and the relevant notes, answer the following: (a) What is the functional currency of the firm? Describe the guidelines the Company will consider to determine the functional currency of this entity. 3 marks (b) Explain (in your own words) how the transactions are translated by your Company and which exchange rates are used ? 2 marks (c) What is foreign currency risk? Identify how your Company takes steps to manage foreign currency risk. 3 marks (d) What is the balance of the Foreign currency translation reserve? Explain what your company includes in this account. 2 marks (e) For part (e) use the following information: 10 marks Onoyoko Ltd, a company operating in Singapore, is a wholly-owned subsidiary of Muscat Ltd, a company listed in Australia. Muscat Ltd formed Onoyoko Ltd on 1 July 2016 with an investment of A$310 000. Onoyoko Ltd’s records and financial statements are prepared in Singaporean dollars (S$). Onoyoko Ltd has prepared the following financial statements at 30 June 2017. ONOYOKO LTD Statement of Financial Position as at 30 June 2017 S$ Current assets: Inventory 205 000 Monetary assets 195 000 Total current assets 400 000 Non-current assets: Land – acquired 1/7/15 100 000 Buildings – acquired 1/10/15 120 000 Plant and equipment – acquired 1/11/15 110 000 Accumulated depreciation (10 000) Deferred tax asset 10 000 Total non-current assets 330 000 Total assets 730 000 Current liabilities: Current tax liability 70 000 Borrowings 50 000 4 Payables 100 000 Total current liabilities 220 000 Non-current liabilities: Borrowings 150 000 Total liabilities 370 000 Net assets 360 000 Equity: Share capital 310 000 Retained earnings 50 000 Total equity 360 000 ONOYOKO LTD Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2017 S$ S$ Sales revenue 1 200 000 Cost of sales: Purchases 1 020 000 Ending inventory 205 000 815 000 Gross profit 385 000 Expenses: Selling 120 000 Depreciation 10 000 Interest 20 000 Other 90 000 240 000 Profit before income tax 145 000 Income tax expense 60 000 Profit for the period 85 000 The only movement in equity, other than in profit, was a dividend paid during the period of S$35 000. Additional information 1. Exchange rates over the period 1 July 2016 to 30 June 2017 were: S$1.00 = A$ 1 July 2016 1.00 1 October 2016 0.95 1 November 2016 0.90 1 January 2017 0.85 1 April 2017 0.75 5 30 June 2017 0.75 Average rate for year 0.85 Average rate for final quarter 0.77 2. Proceeds of long-term borrowings were received on 1 July 2016 and are payable in four annual instalments commencing 1 July 2017. Interest expense relates to this loan. 3. The inventory on hand at the end of the reporting period represents approximately the final 3 months’ purchases. 4. Revenues and expenses are spread evenly throughout the year. 5. Deferred tax asset relates to depreciation of the plant and equipment. 6. The dividends were paid on 1 April 2017. Required: The functional currency is determined to be the Australian dollar. Translate the financial statements of Onoyoko Ltd into the functional currency. Question 3: Revaluation and Impairments (suggested words count: 800) 10 Marks Please refer to the annual report of the ASX Company that has been allocated to your group. Based on the annual report and the relevant notes, answer the following: (a) At 30 June 2017, what portion of the total assets is made up of intangible assets? (express your answer as a percentage, to 2 decimal places). 2 marks