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Advance Financial Accounting Assignment

   

Added on  2020-03-15

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Running head: ADVANCE FINANCIAL ACCOUNTINGAdvance Financial AccountingName of the Student:Name of the University:Authors Note:
Advance Financial Accounting Assignment_1
ADVANCE FINANCIAL ACCOUNTING1Table of ContentsQuestion 1: Stating the measures used in identifying fair value................................................2Question 2:.................................................................................................................................31. Peewee Ltd journal entries for the year ended 30 June 2017:................................................32. Peewee Ltd journal entries for the year ended 30 June 2018:................................................4Question 3:.................................................................................................................................61. Stating the impact of internally generated intangible assets in AASB 138/IAS 38:..............62. Difference between accounting for internally generated intangible assets and acquiredintangible assets in AASB 138/IAS 38:.....................................................................................73. Mentioning the reasons behind companies being reluctant to change in AASB 138/IAS 38:....................................................................................................................................................7Question 4:.................................................................................................................................81. Revealing the surplus or deficit of Wattle Ltd’s defined benefit plan at 31 December 2016:....................................................................................................................................................82. Mentioning the net defined benefit asset or liability at 31December 2016:.........................93. Stating the net interest and the return on plan assets in 31 December 2016:.........................94. Providing reconciliation regarding opening balance and closing balance of the net definedbenefit liability:..........................................................................................................................95. Drafting journal entry to defined benefit superannuation plan in the books of Wattle Ltd forthe year ended 31 December 2016:..........................................................................................10Reference and Bibliography:....................................................................................................12
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ADVANCE FINANCIAL ACCOUNTING2Question 1: Stating the measures used in identifying fair valueThe highest valuation of the property is considered:From the evaluation of the case study it could be identified that if the plot is sold forresidential purposes then the overall and will provide $1,000,000 in revenue. However, thereis relevant estimation of cost for demolition it needs to be incurred by the company, whichamounts to $100,000. Therefore, from the evaluation it could be identified that there arerelevant income that could be provided from the plot is $900,000. Furthermore, if theproperty can be used for factory purposes or outlet the relevant cost of $780,000 will beinitiated for building a new factory.However, the existing factory will only cost $390,000 forthe firm, which is relatively lower than the residential plot price. Hence, using the plot forresidential purposes will eventually allow the organisation generate higher revenue fromsales. Consequently, the highest valuation is mainly identified as residential valuation(Ramachandra, 2017).Mentioning the overall benefit for selling the plot in market value:From the evaluation it could be identified that using the property for residentialpurposes would eventually allow the organisation to improve its current revenue generationcapacity. Stating whether the asset is subject to measurement: The evaluation directly indicates that there are two different types of valuation thatcould be conducted for identifying the overall value of the asset. The first valuation could beconducted only on the premises singly, which would help in identifying the actual value ofthe asset. The other valuation directly indicates that both the premises and factory will bevalued separately to identify the total value of the asset (Rooney & Dumay, 2016).Mentioning the adequately valuation techniques:
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ADVANCE FINANCIAL ACCOUNTING3There are two types of valuation approaches that need to be conducted for derivingthe fair value of the land, which includes residential valuation approach and industrialvaluation property. However the residential valuation approach only includes the plot andexcludes the factory, which is situated on the plot. This relevant valuation only needs toevaluate the plot on the basis of residential valuation, which is relevantly at $900,000. Thesecond valuation mainly depicts the industrial valuation approach which directly evaluates apossibility of factory on the plot. However, the evaluation of the residential plot is relativelyhigher against any other valuation, which directly indicates that the company should use theresidential valuation approach for identifying the fair value of the land (Sugiyama & Islam,2016).Question 2:1. Peewee Ltd journal entries for the year ended 30 June 2017:1st July2016Machine A...........................................................DrMachine B...........................................................Dr Cash........................................................Cr100,00060,000160,00030th June2017Depreciation-Machine A................................................Dr Accumulated Depreciation............................Cr(1/5 * $100,000 = $20,000)20,00020,000Depreciation-Machine B................................................Dr Accumulated Depreciation.............................Cr(1/3 * $60,000 = $20,000)20,00020,000Accumulated Depreciation Machine A..........................Dr Machine A...................................................Cr(being writing down the carrying amount)20,00020,000Machine A.................................................................Dr Gain on revaluation of Machine A (OCI)........Cr(being revaluation of increment $80,000 to $84,000)4,0004,000Gain on revaluation of Machine A (OCI)........................Dr Asset revaluation surplus Machine A..............Cr(being increase in net revaluation gain in equity)4,0004,000Accumulated Depreciation Machine B..........................Dr Machine B...................................................Cr20,00020,000
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