Corporate Reporting

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ACC00713 Corporate Reporting
Assignment 1

SOUTHERN CROSS UNIVERSITY
ASSIGNMENT COVER SHEET
For use with online submission of assignments
Please complete all of the following details and then make this sheet the first page of each file of your assignment – do not send it as a separate document.
Your assignments must be submitted as either Word documents (with .doc extension, NOT.docx), text documents with .rtf extension or as .pdf documents. If you wish to submit in any other file format please discuss this with your lecturer well before the assignment submission date.

STUDENT NAME:
STUDENT ID. NO.
UNIT NAME:
UNIT CODE:
TUTOR'S NAME:
ASSIGNMENT NO.
ASSIGNMENT TITLE:
DUE DATE:
DATE SUBMITTED:

MAX KELLY GREER
21860641
CORPORATE REPORTING
ACC00713
CHRISTOPHER HUDSON
ONE
ONE
26-Feb-12
20-Feb-12

Declaration:
I have read and understand the Rules relating to Awards (Rule 3.17) as contained in the University Handbook. I understand the penalties that apply for plagiarism and agree to be bound by these rules. The work I am submitting electronically is entirely my own work.

Signed:
Date:

MAX KELLY GREER
20th February 2012

Max K Greer
21860641

ACC00713 Corporate Reporting
Assignment 1

QUESTION ONE
1 July 2010 Part A
Cash
(Purchase of Part A)

800,000
800,000

30 June 2011 Depreciation Expense
Accumulated Depreciation
(Record depn @ 800,000/4 useful life)

200,000

30 June 2011 Accumulated Depreciation
Part A

200,000

Part A
Revaluation Increment (Gain)
(Revalue Part A to $690,000)

200,000

200,000
90,000
90,000

1 July 2010 Part B
Cash
(Purchase of Part B)

500,000
500,000

30 June 2011 Depreciation Expense
100,000
Accumulated Depreciation
(Record depn @ 500,000/5 useful life)
30 June 2011 Accumulated Depreciation
Part B
Revaluation Decrement (Loss)
Part B
(Revalue Part B to $360,000)

30 June 2012 Depreciation Expense
Accumulated Depreciation
(Record depn @ 690,000/3 useful life left)

230,000

Accumulated Depreciation
Part A

230,000

Revaluation Decrement (Loss)
Part A
(Revalue Part A to $420,000)

230,000

230,000
40,000
40,000

Max K Greer
21860641

50,000

100,000

30 June 2011 Depreciation Expense
10,000
Accumulated Depreciation
(Record depn @ 50,000/5 useful life)

100,000

30 June 2012 Depreciation Expense
10,000
Accumulated Depreciation
(Record depn @ 50,000/4 useful life left)

100,000

40,000
40,000

31 December 2011 Depreciation Expense
45,000
Accumulated Depreciation
45,000
(Record 1/2 depn @ $360,000/4 useful life left x 50%)
Cash
Accumulated Depreciation
Loss on Sale
Part B
(record sale of Part B)

1 July 2010 Furniture
Cash
(Purchase of Furniture)

300,000
45,000
15,000
360,000

ACC00713 Corporate Reporting
Assignment 1

QUESTION TWO
AASB 138 (8) requires the immediate expensing of all expenditure undertaken on the research component of Research and Development. Therefore research is required to be considered separately from development as development generally follows research. In this sense, the journal entry for the research of $510,000 McGoy Ltd undertook would be: DR

CR

Research expense
Bank
(To record research expenditure of plastics)

510,000
510,000

AASB 138 (8) implies that typically development involves the commercial application of 'knowledge' generated in the earlier research phase. In this instance, McGoy Ltd developed a prototype surfboard in 2008 at a cost of $780,000 and according to AASB 138 (21 & 57), the test for deferral and recognition of development as an intangible asset journal is that it is probable that a future economic benefit would flow to the entity. In this case McGoy Ltd received forward orders of $40 million. Therefore the journal entry to record development costs would be: 2011

DR
CR

Prototype Development (asset)
Bank
(To record cost of developing prototype surfboard)

780,000
780,000

The legal...
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