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ACCT 1048 Corporate Accounting (Melboume) Final Examination - Semester t, 2012
Page 1 of 5
REQUIRED: Describe and explain how the lollowing item should be accounted lor, and disclosed in the
Statement ol Comprehensive Income, Statement ol Changes in Equity, Statement ol Financial Position, and/or Notes to the linancial statements ol Horan L1d, lor the linancial year ended 30 June 2011. Horan L1d is a reporting entity.
Assume that Prolit after Income Tax ol Horan L1d lor the linancial year ended 30 June 2011 is $1,000,000, and the company income tax rate is 30%.
At 30 June 2010, Horan L1d capitalised development expenditure ol $310,000, incurred on a project concerned with developing medication to stop ear inlection. During the 2010-2011 linancial year, Horan L1d incurred lurther expenditure ol $430,000 on the medication project. By 30 June 2011 the project encountered some significant technical problems, which remain unresolved.
PARTB ln January 2012, after the linancial statements have been audited and published lor 30 June 2011 you discover there are two employees who were entitled to long service leave as at 30 June 2011 but have not been accounted lor in the 30 June 2011 linancial statements. The total amount that
has been omitted is $6,000. The company's after tax prolit lor the year ended 30 June 2011 was $40,000. This event could either be a Prior Period Error or a Revision ol Estimate. REQUIRED:
(a) Justily why this is a Prior Period Error rather than a revision ol an estimate.
Explain how it would be treated in the linancial statements lor years ended 30 June 2012. (Please Note: Ignore tax ellect) (1 + 3) = 4 marks)
PARTe (a) AASB 110 relers to two types ol events: adjusting and non adjusting. Provide one example ol each and the associated reporting requirements in accordance with AASB 110. II a post balance date event is so extreme as to threaten business linancial viability, describe how this may impact reporting requirements under AASB 110 Post Balance Day Events.
«4+4) + 2 = 10 marks)
ACCT 1048 Corporate Accounting (Melboume) Final Examination - Semesler 1, 2012
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Tran Ltd earned Taxable Ineome of $1,400,000, for the year ended 30 June 2011. Additional Information
On 1 July 2008, Tran Ltd purehased a plant at a eost of $1,200,000. For aeeounting purposes, the plant is depreeiated on a straight line basis over 8 years, with zero residual value. For tax purposes,...
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