RECENT ASSIGNMENT

Question One:
XYZ PTY LTD acquired a toy-stuffing machine at a cost of $150 000 on 1 July 2009. The machine had a useful life of 10 years and a residual value of $30 000. The benefits from the machine are expected to be derived evenly over its life. On 1 July 2011 the assets fair value is $110 000 and the salvage value and useful life are expected to be unchanged (that is, there is 8 years of remaining life). On 30 June 2011 the machine is sold for $60 000 cash.
Required:
What are the journal entries required to record the depreciation for the year ended 30 June 2011 and the sale of the machine in accordance with AASB 116 if: (a) the revaluation is undertaken and (b) the revaluation is not recorded?
Question Two:
Darling Harbour Pty Ltd owns an item of machinery that has a cost of $700 000 and accumulated depreciation of $200 000 as at 1 July 2014. On that date the machine is sold to Blue Ltd for $533 493, and then leased back over 8 years (the remaining life of the machine). The lease is non-cancellable. The lease payments are $100 000 per annum, payable in arrears on 30 June each year. The interest rate implicit in the lease is 10% and the economic benefits of the asset are expected to be realized evenly over its life.
Required:
What are the entries to record the transactions in Darling Harbour’s books on 1 July 2014 and 30 June 2015 (rounded to the nearest dollar)?
Question Three:
NSW Pty Ltd had recorded an accounting profit of $150000, which include the following items:
$25000 Depreciation of plant and equipment
$5000 Doubtful debts expense
$8000 Long-service leave expense
For taxation purposes the following amounts were regarded as allowable deductions:
$32000 Depreciation of plant
$6000 Bad debt written off
$3000 Long service leave paid
Assume a tax rate of 30%.
Required:
(1) Calculate taxable income (tax loss) for the current year (3 marks)
(2) Prepare the journal entry to record income tax expense. (2 marks)
Question Four:
Kiama Ltd purchased 100% of the issued capital of Wollongong Ltd for a cash consideration of $1.7 million on 1 July 2014. At that time the fair value of the net assets of Wollongong Ltd were represented by:

Goodwill had been determined to have been impaired by $20 000 during the period. During the period ended 30 June 2015, Wollongong Ltd sold inventory that cost $450 000 for $620 000 to Kiama Ltd. Twenty per cent of this inventory remains on hand in Kiama Ltd at the end of the year. Both companies use a perpetual inventory system. The taxation rate is 30%. At the end of the period Wollongong Ltd declared a dividend of $45 000 that has not yet been paid.
Required:
What consolidation journal entries are required for the period ending 30 June 2015?
Question Five:
AQC Ltd purchased 75 per cent of the issued capital and in the process gained control over WMN Ltd on 1 July 2013. The fair value of the net assets of WMN Ltd at purchase was represented by:

AQC Ltd paid cash consideration of $4 000 000 for WMN Ltd. During the period ended 30 June 2015, WMN Ltd paid management fees of $540 000 to AQC Ltd and WMN had an operating profit of $980 000. WMNs opening retained earnings at the beginning of the period were $1 460 000. At the end of the period WMN Ltd declared a dividend of $90 000. There were no other inter-company transactions. Goodwill was determined to have been impaired by $19 000 during the period. Companies in the group accrue dividends when they are declared by subsidiaries.
Required:
For the period ended 30 June 2015, what consolidation journal entries are required and
Calculate the non-controlling interest?