Sample Exam Corporate Acc

SECTION B

In the examination answer booklet complete each of the following short answer questions as required.

Question 21: (4 marks)

What is a cash generating unit? For the purposes of asset impairment testing, when is it necessary to consider cash generating units rather than the individual assets comprising the unit?

Question 22: (4 marks)

Explain the general nature of the accounting requirements specified in AASB 1039: Concise Financial Reports.

Question 23: (4 marks)

Define the terms ‘consolidated entity’ and ‘reporting entity’.

SECTION C

Question 24: (5 + 5 = 10 marks) Liquidation

One Direction Ltd went into voluntary liquidation on 30 June 2012. Its shareholders’ equity was as follows:

$
$
*35 000, 6.5 % preference shares (cumulative) of $2 each paid to $1.50
52 500

30 000 first issue ‘A” ordinary shares of $1 each fully paid
30 000

25 000 second issue ‘A’ ordinary shares of $1 each paid to 75cents
18 750

6 000 ‘B’ ordinary shares of $1 each paid to 25 cents 1 500
102 750

General reserve

8 700
Retained profits

5 000

116 450

Note: The last preference dividend was paid to 30 June 2010.

To adjust the rights of shareholders the liquidator made the following calls:
25 cents per share on the second issue ‘A’ ordinary shares; and
50 cents per share on ‘B’ ordinary shares

All amounts due on these calls were received, except those in respect of 400 second issue ‘A’ ordinary shares and 300 ‘B’ ordinary shares. These proved to be irrecoverable and were forfeited.
Debts due by the company amounted to $19 550, and liquidation expenses were $1 050.
The liquidator’s remuneration was fixed at 1% on the proceeds of assets.
The assets realised as follows: $ Trade debtors 4 700 Inventory 28 000 Land and Buildings 60 000 Plant and tools 5 800

Required:

a) Prepare the liquidator’s final statement of receipts and payments (this will calculate your cash available