CORPORATE ACCOUNTING

Topic 1 Part A (75%)    FMCG Ltd (who is in dispose-of duty) has to adapt its dim financial propoundments at 30 June 2019. FMCG Ltd had habitual its 85% cause in RG Ltd on 1 July 2017, that is, two years precedent. At that duration the high and reserves of RG Ltd were:  Share high $200,000 Retained rights $170,000    At the duration of compensation all asset of RG Ltd considered to be unblemished esteemd.  The financial propoundments of FMCG Ltd and its favourable RG Ltd at 30 June 2019 are as follows:  Statement of financial position  Description  FMCG Ltd ($000) RG Ltd ($000) Present proceeds   Accounts receivable 60 62 List 90 30 Non-present proceeds   Land and buildings 225 325 Plant-at require 300 356 Accumulated slander (86) (140) Investment in RG Ltd 360 - Gross  949 633    Current liabilities   Accounts payable 56 45 Taxation payable 42 24 Non-present liabilities   Loans payable 175 118 Shareholders’ equity   Share high 350 200 Retained rights 326 246 Gross 949 633    Detailed amity of chink and withdrawal retained rights  Description  FMCG Ltd ($000) RG Ltd ($000) Sales wealth 700 575 Require of consequence sols (465) (235) Gross advantage 235 340 Expenses   Administration prices (30) (40) Conduct fee prices - (26) Slander (25) (55) Other prices (102) (76) Other proceeds    3    Management fee proceeds 26 - Dividends from RG Ltd 75 - Gain on sale of introduce 35 - Advantage antecedently tax 214 143 Tax price (65) (43) Advantage for the year 149 100 Retained rights- 30 June 2018 315 240  464 340 Dividends compensated (138) (94) Retained rights- 30 June 2019 326 246    Following are the roll of transactions among FMCG Ltd and its favourable RG Ltd during the year 1 July 2018 to 30 June 2019: • RG Ltd compensated $26,000 in conduct fee to FMCG Ltd. • FMCG conduct sturdy that the kindness is diminished by $5,000 in the present financial year. Earlier accumulated inconclusiveness amounted to $22,000. • During the year FMCG Ltd made gross sales to RG Ltd of $60,000, suitableness RG Ltd sold $50,000 in list to FMCG Ltd.  • The chink list in FMCG Ltd as at 1 July 2018 included list habitual from RG Ltd for $40,000 that had require RG Ltd $33,000 to effect.  • The withdrawal list in FMCG Ltd includes list purchased from RG Ltd at a require of 33,000. The require of this list to RG Ltd was $27,000. • The withdrawal list of RG Ltd includes list habitual from FMCG Ltd at a require of $12,000. This require FMCG Ltd $9,000 to effect. • On 1 July 2018, FMCG Ltd sold an ace of equipment to RG Ltd for $120,000 when its carrying esteem in FMCG Ltd was $80,000 (require of $132,000, accumulated slander of $52,000). Remaining beneficial conduct for this equipment is life assessed as six years. • Conduct of FMCG Ltd esteems any non-controlling cause at the regular portion-out of RG Ltd’s identifiable net proceeds. • Applicable tax trounce is 30%. • All adapted amounts are to be rounded to the closeest gross dollar.    Required: Adapt the agreement eliminations journals indispensable and required antecedently making-ready of dim financial propoundments of FMCG Ltd and its favourable (propound narrations to journals, equip open workings and explanations). To-boot adapt a caution of non-controlling cause at compensation duration, among compensation duration and the initiation of the reporting time and for present reporting time.  (30 marks)   4    Topic 1    Part B (12.5%)    The dim financial propoundments of FMCG Ltd and RG Ltd were presented to the Board. The Board is distrustful that the economic existence’s estimate subterfuge (dim estimate subterfuge) shows a distant tax estimate, when the accounts for FMCG Ltd had no distant tax asset or distant tax impost.  FMCG conduct is to-boot planning to reap another existence ABC Investments Ltd in the close advenient. Conduct marked out to the Board that on compensation, the financial results of this new favourable (ABC Investments Ltd) procure to-boot be dim in the economic existence financial propoundments.  One of the Board members famous that the new duty to be habitual by FMCG Ltd is an investment sodality. Its financial propoundments should not be dim owing it is complicated in investments activity, inasmuch-as all of the other companies in the economic existence are complicated in dispose-of activity.  Required:  As the financial accountant you are requested to adapt a counterpart to the aftercited questions:  (a) Why does the economic existence bear a distant tax estimate? (2.5 marks)    (b)  Should the financial propoundments of proposed habitual duty, ABC Investments Ltd, be dim into the economic existence and why? (2.5 marks)    Please hush that in your counterpart you must create allusion to bearing paragraphs of the Accounting Standard and/or AASB Framework and to other sources of representative.     5    Topic 2 (12.5%)  Paragraph 23 of an precedent account of IAS 38 Unaware Proceeds propounds that:  The Board’s estimate, suitably reflected in earlier proposals for unaware proceeds, is that there should be no discord among the requirements for: (a) unaware proceeds that are habitual externally; and (b) internally generated unaware proceeds, whether they commence from outgrowth activities or other types of activities.  Required: Evaluate the overhead estimate, test and clear-up inconsistencies among this estimate and the present requirements of AASB 138. (5 marks)