Corporate Reporting
Group Assignment 20%
Due date: Monday (5.00pm), 23 September 2016
1. The assignment is a compulsory group assignment and is worth 20% of the
marks of the subject.
2. The group must be comprised of three (3) students.
3. You must keep a copy of your assignment (in hard copy form) until you
receive the marked original back. If you assignment is lost and you fail to
provide us with a copy of the assignment when requested, we will assume the
assignment has not been written and the penalties for late assignment will be
applied. The duplicate copy of the assignment must be signed by the lecturer
or any tutor before submission.
4. The assignment must be presented in a professional manner (word processed).
5. Submissions must be properly referenced (refer to the University Style Guide).
6. Plagiarism is a serious matter; all students involved will be referred to the
University’s appropriate authority.
7. Late submission will incur a penalty of one mark per day including the
weekend. Late submission must be lodged with Course Coordinator only.
8. Application for extensions must be lodged with the Course Coordinator before
due date in writing for granting an extension (medical problems etc.).
1
Question 1
(50 Marks)
“Although the 2005 adoption of IFRS was a major regulatory transition affecting
several tens of thousands of companies worldwide, its costs and benefits were initially
unclear.” (George, Li & Shivakumar, 2016).
Reference:
George, Li & Shivakumar (2016), A review of the IFRS adoption literature, Review of
Accounting Studies (forthcoming).
Required:
Critically discuss the above statement by outlining costs and benefits of adopting
IFRS by reporting entities throughout the world. Do you think that culture has any
influence on harmonising accounting standards globally?
Note 1: Word limit for Question 1 is 1,000.
Note 2: Professional marks will be awarded for format, clarity and expression.
Note 3: The presentation of Question 1 should include Introduction, Discussion,
Conclusion and List of references.
Note 4: You will be able to collect electronic copies of articles by visiting La Trobe
University Library website.
2
Question 2 (Word limit = 500 words)
(50 Marks)
The following details are taken from the accounting records of Cootamundra Ltd. at 30 June 2015.
Trial Balance as at 30 June, 2015
Sales Revenue
Rent Revenue
Salaries
Light, power & fuel
Audit Fees
Interest Expense
Damage due to fire
Purchases
Interim dividend
Cash at bank
Inventories
Accounts Receivable
Provision for Doubtful Debts
Term deposit – due 30th September, 2015
Marketable Securities (long term)
Insurance paid in advance
Plant & Machinery
Furniture & fittings
Buildings
Accounts Payable
Accumulated Depreciation – Plant & Machinery
Accumulated Depreciation – Furniture & fittings
Accumulated Depreciation – Buildings
Bank Mortgage secured over buildings, due 1st May, 2017
Share Capital
General Reserve
Retained Earnings
Debit
Credit
AUD $
AUD $
2,000,000
149,500
240,000
75,000
30,000
24,000
99,000
1,080,000
24,000
228,000
345,000
256,500
30,000
498,000
120,000
60,000
270,000
300,000
435,000
4,084,500
180,000
135,000
90,000
87,000
450,000
750,000
120,000
93,000
4,084,500
3
Additional Information
(a) Salaries not paid at 30th June amounted to $30,000.
(b) Unpaid power account for June totalled $16,000.
(c) Prepaid insurance attributable to current year is 24,000.
(d) Cootamundra Ltd. uses the periodic inventory system. The stock-take of 30 th
June shows closing inventory of $330, 000 (valued at lower of cost and
market value).
(e) Interest on bank mortgage is 10% per annum and is payable twice yearly on
31st December and 30th June. The amount due at 30 June has not been
recognised.
(f) Depreciation rates on the straight line basis are as follows:
a. Plant & Machinery
b. Furniture & Fittings
c. Buildings
10%
5%
5%.
(g) The current market value of marketable securities is $126,000.
(h) Tax expense was calculated to be $80,000.
(i) A final dividend of 5% of paid-up-capital was declared and approved in 30 th
June 2015.
(j) On 21st June 2015, Cootamundra Ltd. was notified of an impending legal suit
for $25,000 against the company for breach of contract. The case was settled
15th July 2015.
(k) The tax rate is 30%.
Required:
1) Prepare the necessary adjusting journal entries required by items (a) to
(l) (narrations are not required). (14 Marks)
2) Prepare a Statement of Comprehensive Income, a Statement of Financial Position
and a Statement of Changes in Equity for Cootamundra Ltd for the year ended 30th
June 2015 in accordance with the requirements of AASB 101. (21 Marks)
3) Prepare at least fifteen (15) notes to the financial statements according to comply
with relevant accounting standards. (15 = 30 Marks)
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