Posted: April 18th, 2022

Page 1 Kaplan Business School Assessment Outline

Page 1 Kaplan Business School Assessment Outline

Assessment 3 Information

Subject Code: ACCM4300

Subject Name: Financial Reporting

Assessment Title: Assessment 3

Assessment Type: Individual Assignment

Weighting: 30 %

Total Marks: 30

Submission: Via Turnitin-written report

Due Date: Monday of Week 13 at 19:55 AEST

Your Task

You are required to prepare a business letter to answer key accounting issues in regard to acquisition analysis of partly owned subsidiary and intra-group transactions.

Assessment Description

Assume that you are a team of graduate accountants working for Hero Accounting Group, a public accounting firm situated at 346 Gregory Street, Sydney, NSW 2000. The Manager of your firm, Ms. Grace Harper, has asked you to prepare the SOA in response to an email received from a client, Mr. William Kane, the Managing Director of Amy Ltd, raising several accounting issues. Please refer to the email on the next page.

The maximum length for the body of the letter is 1,500 words. You should address all the technical issues/discussion in the letter, followed by a Reference List.

• Part A: Technical component 25% – This mark covers the technical content of your advice and the explanation of each of the issues, the calculations, and the sources used. Also letter Writing covers the generic skills of Letter writing; layout, clear meaning, structure and organisation, appropriate tone and grammar, spelling, and punctuation, etc. throughout the whole assignment.

• Part B: Communication Skills – Letter Writing 5% – This mark covers the generic skills of Letter writing; layout, clear meaning, structure and organisation, appropriate tone and grammar, spelling, and punctuation, etc. throughout the whole assignment.

Page 2 Kaplan Business School Assessment Outline

Case Study

One of your clients has emailed your firm with several queries. Draft a business letter in reply and make sure you reference any relevant sources relating to your advice, for example, AASBs, Corporations Act, and relevant websites. See the email below.

Re: Accounting Issues: Year Ending 30 June 2021

From: William Kane (wkane@amy.com.au)

Sent: 8 July 2021

To: Grace Harper (grace.harper@herogroup.com.au)

Dear Grace,

As discussed, our chief accountant is currently on leave. I need to understand the following

transactions and events to present to the Board regarding the financial impacts of our recent takeover.

The chief accountant left me a note, but I am unsure of the effect of the below transactions. Can you

please provide me with a more detailed explanation just in case the board request further information?

Please remember the Board of directors have varying degrees of accounting knowledge, so please

limit the use of technical accounting terms.

Recently Amy Ltd acquired 100% of the issued shares of Astra Ltd for $80,000 (Astra Ltd.’s owner’s

equity at the time of purchasing was $100,000 made up of share capital of $80,000 and retained

earnings of $20,000). One of the liabilities of Astra Ltd was $18,000 for the dividend payable but not

yet paid, and our accountant informed me that the shares were acquired based on Ex-dividend. In

addition, one of the areas of discussion during the negotiation process was the current court case that

Astra Ltd was involved in. No monetary amount was disclosed, but the company’s lawyers had placed

a $6000 amount on the probable payout to settle the case.

Having prepared the acquisition analysis as part of preparing the consolidated financial statements

for Amy Ltd, can you explain how the unrecorded contingent liability of $6,000 by the subsidiary Astra

Ltd affects the group’s goodwill? I believe the goodwill for Amy Ltd should be $20,000 (being $80,000

less $100,000). Is this correct?

In addition, will the dividend payable by the subsidiary entity Astra Ltd impact the acquisition analysis?

Please explain?

The accountant told me that she had eliminated transactions incurred between the companies Amy

Ltd and Astra Ltd. The sales are legitimate, we have exchanged invoices and contracts, so can you

explain why we need to eliminate the inter-company transactions? I have extracted two examples

below. Would you please examine the following transactions for errors? If incorrect, explain why and

provide me with the corrected journal entries.

1. At the beginning of the current period, Amy Ltd sold Equipment to its wholly-owned subsidiary,

Astra Ltd, for $320,000. Amy Ltd had initially paid $800,000 for this asset, and at the time of

sale to Astra, Ltd had charged depreciation of $600,000. This asset is used differently in Astra

Ltd from how it was used in Amy Ltd; thus, whereas Amy Ltd used a 15% p.a. straight-line

depreciation method, Astra Ltd uses a 25% straight-line depreciation method. In calculating

Page 3 Kaplan Business School Assessment Outline

the depreciation expense for the consolidated group, the group accountant is unsure which

depreciation rate should be applied and which depreciation rate to use.

2. On 1 May 2021, Astra Ltd sold inventory for $25,000 to Amy Ltd at cost plus 25%. On 30 June

2021, Amy Ltd sold two-thirds of the inventory to other entities for $25,000 but still holds one-

third of these inventories as of 30 June 2021. Can we debit Sales for $50,000, credit the Cost

of Sales for $25,000 on 30 June 2021? Do we need to do anything else?

Please respond by letter (not email) as I would like to present this to the Board. I look forward to hearing from you shortly.

Regards

William Kane

Managing Director, Amy Ltd Level 6,

4300 Random Street,

Sydney NSW 2000

Page 4 Kaplan Business School Assessment Outline

Assessment Instructions

• The assignment file will need to be submitted electronically through the student portal – use the link under “Assessments”.

Referencing

• Any sources that you use need to be acknowledged in order to avoid plagiarism. Information on referencing can be found in the Guidelines for Referencing and Presentation at the Kaplan website using the following address: (https://elearning.kbs.edu.au/mod/page/view.php?id=128881).

In‐Text Referencing and the Reference List

• Sources of information must be cited both in the body of the text (in‐text referencing) and the end of the assignment (reference list). Failure to do so will result in penalties. Remember that when referencing an Annual Report, it is a corporate document that does not have a particular author but it will still require referencing any time you use information from it. Any other documents or books or other references you use will also require referencing.

Please note

• Any work which has been copied or shared between students will result in a Fail grade for all students concerned. Therefore, please make sure that the answer to this assignment is your work and not copied or bought from any source. In completing this assignment make sure you follow the guidelines for assignments especially those relating to the presentation of written work, late assignment policy and academic integrity.

Page 5 Kaplan Business School Assessment Outline

Important Study Information

Academic Integrity Policy KBS values academic integrity. All students must understand the meaning and consequences of cheating, plagiarism and other academic offences under the Academic Integrity and Conduct Policy. What is academic integrity and misconduct? What are the penalties for academic misconduct? What are the late penalties? How can I appeal my grade? Click here for answers to these questions: http://www.kbs.edu.au/current-students/student-policies/.

Word Limits for Written Assessments Submissions that exceed the word limit by more than 10% will cease to be marked from the point at which that limit is exceeded.

Study Helpance Students may seek study Helpance from their local Academic Learning Advisor or refer to the resources on the MyKBS Academic Success Centre page. Click here for this information.

http://www.kbs.edu.au/current-students/student-policies/
https://elearning.kbs.edu.au/course/view.php?id=1481
ACCM4300 Assessment Information

Page 6 of 7 Updated: 13 October 2021

ACCM4300 Assignment Rubrics: 30% Individual Assessment

Components High Distinction

85 – 100%

(Marks 25.5 to 30)

Distinction

75 – 84%

(Marks 22.5 to 25.4)

Credit

65 – 74%

(Marks 19.5 to 22.4)

Pass

50 – 64%

(Marks 15 to 19.4)

Fail

0 – 49%

(Marks 0 to 14.9)

Mark

Awarded

(Out of 30)

Technical component

Journal entries, Calculations, Explanations

25%

It clearly identifies and addresses all the technical issues raised & provides clear, correct & decisive answers displaying an outstanding understanding of each of the technical issues. It is easy for the client (non-accountants) to understand. Where applicable and appropriate reference has been correctly made to the AASBs, GAAPs and other legislation

It clearly identifies and addresses most of the technical issues raised by the client and provides clear, correct and decisive advice displaying a good understanding of most of the technical issues. It is easy for the client (non- accountants) to understand.

Where applicable and

appropriate,

reference has been

correctly made to the

AASBs, GAAPs and

other legislation

It clearly identifies & addresses some of the technical issues raised by the client and provides reasonably clear, correct and decisive advice displaying a reasonably good understanding of some of the technical issues. It is relatively easy for the client to understand.

Reference has been

made (with gaps) to

some of the AASBs,

GAAPs and other

legislation where

applicable

It identifies and addresses some of the technical issues raised by the client and provides fairly clear, but not always correct and/or decisive advice. It displays a reasonable understanding of some of the technical issues raised.

It is relatively easy for

the client to

understand.

Reference has been

made (with gaps) to

some of the AASBs,

GAAPs and other

legislation where

applicable and/or

appropriate

It does not identify or address the technical issues raised by the client It displays a lack of understanding of some or most of the technical issues raised. It is difficult for the client to understand. It does not give correct clear and/or decisive advice on most of the issues raised and makes little or no reference to the AASBs, GAAPs and other legislation where applicable.

ACCM4300 Assessment Information

Page 7 of 7 Updated: 13 October 2021

Communication Skills/Writing

Written Business Letter with letterhead Overall Presentation, Language and Grammar 5%

The Letter includes letterhead with a logo and business name. Recipient name and address clearly identified. Date and subject line included. Presentation, formatting and structure on par with highest professional standards. Exceptional and eloquent use of the English language presented clearly, sequentially and without errors in grammar and referencing.

The Letter includes letterhead with a logo and business name. Recipient name and address clearly identified. Date and subject line included. Only minor improvements are needed in presentation, formatting and structure for high professional standards to be met. An excellent use of the English language though minor improvements needed in clarity, sequence, grammar and referencing.

The Letter includes letterhead with a logo and business name. Recipient name and address clearly identified. Date and subject line included. An inconsistent application of professional standards of presentation, formatting and structure. A solid use of the English language though obvious inconsistencies exists in terms of clarity, sequence, grammar and referencing.

The Letter includes letterhead with a logo and business name. Recipient name and address clearly identified. Date and subject line included. Major improvements are needed in terms of presentation, formatting and structure.

An acceptable level of English with major improvements required in terms of clarity, sequence, grammar and referencing.

The Letter does not include letterhead and no logo and business name. Recipient name and address clearly identified. Date and subject line included. Unprofessional presentation and formatting with a structure that does not flow.

The application of the English language is difficult to follow and the standard of clarity, sequence, grammar and referencing is below that which would be acceptable by a professional body.

TOTAL MARKS (out of 30 marks)

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