Corporate Accounting System

This report discusses the challenges faced by Super Retail when expanding their business in America and provides solutions to overcome these challenges. It also highlights the competitive retail landscape, cultural differences, and the importance of multi-channel shopping in the US market.

Running head: CORPORATE ACCOUNTING SYSTEM
Corporate accounting system
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CORPORATE ACCOUNTING SYSTEM
Contents
Part A:........................................................................................................................................2
Part B:.........................................................................................................................................5
Introduction:...........................................................................................................................5
Identification of challenges:...................................................................................................5
Solutions to overcome the identified possible impediments:.................................................6
Conclusion:............................................................................................................................6
References list:...........................................................................................................................8

CORPORATE ACCOUNTING SYSTEM
Part A:
Acquisition Analysis:
Particulars
Book
Value Fair Value
Tax
Rate
Net Fair
Value
Share Capital 260000
Retained Earnings 200000
Plant 100000 120000 30% 14000
Net Fair Value of Identifiable
Assets & Liabilities (A) 474000
Cost of Investment (B) 620000
Goodwill Acquired (B-A) 146000
In the books of Super Retail Ltd.
Consolidation Journal Entries
Dr. Cr.
Dat
e Particulars
Amou
nt
Amou
nt
Pa
rt I 1
Business Combination Valuation
Entries:
1.a Accumulated Depreciation 60000
Plant 40000
Deferred Tax Liability 6000
Business Combination Valuation
Reserve 14000
(Being Plant revalued at fair value during acquisition)
1.b Goodwill
14600
0
Business Combination Valuation
Reserve
14600
0
(Being goodwill at acquisition recorded)
2 Pre-Acquisition Entries:
Share Capital
26000
0
Retained Earnings
20000
0
Business Combination Valuation
Reserve
16000
0
Investment in New World Retail
Ltd.
62000
0

CORPORATE ACCOUNTING SYSTEM
(Being 100% shares acquired from New World Retail Ltd. eliminated)
Pa
rt
II 3 Depreciation of Plant:
3.a Depreciation Expense 2000
Accumulated Depreciation 2000
(Being depreciation on revalued plant recorded)
3.b Deferred Tax Liability 600
Income Tax Expense 600
(Being deferred tax adjusted for depreciation on revalued plant)
4
Intragroup Sales & Closing
Inventory:
4.a Sales Revenue 30000
Cost of Sales 26000
Inventory 4000
(Being intragroup sales and profit on closing inventory eliminated)
4.b Deferred Tax Assets 1200
Income Tax Expense 1200
(Being deferred tax adjusted for adjusted profit on closing inventory)
Pa
rt
III 5 Depreciation of Plant:
5.a Depreciation Expense 2000
Accumulated Depreciation 2000
(Being depreciation on revalued plant recorded)
5.b Deferred Tax Liability 600
Income Tax Expense 600
(Being deferred tax adjusted for depreciation on revalued plant)
6
Intragroup Sales & Closing
Inventory:
6.a Sales Revenue 65000
Cost of Sales 65000
(Being intragroup sales eliminated)
6.b Sales Revenue 62000
Cost of Sales 55000
Inventory 7000
(Being intragroup sales and profit on closing inventory eliminated)
6.c Deferred Tax Assets 2100
Income Tax Expense 2100
(Being deferred tax adjusted for adjusted profit on closing inventory)
7 Intragroup Sale of Machinery:
7.a Proceeds from Sale of Machinery
14500
0
Carrying Amount of Machinery
Sold
10000
0
Machinery 45000
(Being profit on sale of machinery eliminated)

CORPORATE ACCOUNTING SYSTEM
7.b Deferred Tax Asset 13500
Income Tax Expense 13500
(Being deferred tax adjusted for profit on sale of machinery)
7.c Accumulated Depreciation 5000
Depreciation Expense 5000
(Being depreciation of sold machinery eliminated)
7.d Income Tax Expense 1500
Deferred Tax Asset 1500
(Being deferred tax adjusted for eliminated depreciation on
machinery)
8 Dividend paid:
Dividend Revenue
10000
0
Dividend Paid
10000
0
(Being dividend received eliminated from New World adjusted)
9 Management Consultant Fees:
9.a
Management Consultant
Revenue 9000
Management Consultant
Expenses 9000
(Being management consultant fees received eliminated from New
World adjusted)
9.b Accrued Expenses 1000
Accounts Receivable 1000
(Being management fees due eliminated)
10 Intragroup Loan & Interest:
10.
a
Long-Term Loan from Super
Retail 50000
Loan to New World Retail 50000
(Being loan to New World Retail eliminated)
10.
b Interest Revenue 2000
Interest Expense 2000
(Being interest revenue from loan to New World Retail eliminated)
10.
c Interest Receivable 1000
Interest Payable 1000
(Being interest revenue due from loan to New World Retail
eliminated)
11 Impairment of Goodwill:
Impairment- Goodwill 6000
Retained Profit 4000
Accumulated Impairment-
Goodwill 10000
(Being impairment on goodwill recorded)

CORPORATE ACCOUNTING SYSTEM
Part B:
Introduction:
The report is prepared is to identify the obstacle and impediments for acquiring the
business in America by Super Retail operating in Australia. In addition to this, the objective
of the report is to identify the solutions that help in overcoming the impediments faced by
Super Retail when expanding the business in America. Super Retail is one of the top retailers
operating in Australia with the purpose of engaging experiences and providing solutions that
inspire the customers to helping them to make most of their leisure time
(Superretailgroup.com.au 2019).
Identification of challenges:
The retail landscape of America has started to look different compared to a decade
earlier and there are a number of factors that have contributed to the changing scenario of
retail business. The objective of Super retail is to grow and expand their business of retailing
the auto, outdoor leisure and sports products in United States.

CORPORATE ACCOUNTING SYSTEM
United States retail environment is highly competitive- The marketplace of retail in
US is highly competitive and matured which poses a major challenge to the companies like
Super Retail. It has been ascertained that the deep pockets are not enough to success by the
retailers as indicated by the recent pullback of Tesco (Dimitri et al. 2017). Such competitive
environment would restrict the growth and development of business of Super retail.
Cultural differences- The differences in culture are also responsible for determining
the growth of business and it is extremely important for the retail business such as Super
retail to know the local markets of US and how they operate and carry out their business. The
digital age and the technological developed countries such as US have retailers who have the
platform of show rooming and this show rooming trouble poses a challenge to the business
seeking expansion (Schultz and Block 2015). It is so because it would be required by the
business to incur huge cost which might not be possible in the initiation of the business
activity.
Targeting and multi channel shopping and keeping customers- In order to take the
advantage of multi channel shopping platform in US, it is required by the business to have
tools and knowledge to take the advantage of this ongoing trend. In the absence of such tool,
the business would not be able to evolve (Lee 2018).
In addition to this, the changing retail technologies in US also pose a challenge to the
companies seeking expansion. This is so because it results in increasing maintenance
requirement and complexities of doing business.
Solutions to overcome the identified possible impediments:
The challenges can be dealt by Super Retail by adopting several measures that would
help in sustaining in the retail market of US.

CORPORATE ACCOUNTING SYSTEM
Integrating the online inventory and real time in store- Super retail company can
overcome the issue of dealing with the competitive retail landscape in US by integrating the
online stores with the real time stores (So et al. 2016).
Adopting supply chain as differentiator- Retailers in the company would be able to
provide customers with differentiated service using the supply chain. Therefore, the supply
chain should be made more predictable and quicker (Bogomolova et al. 2015).
Vendor supply integration- Such integration would help Super Retail in facilitating
the business in countries such as US.
Conclusion:
From the discussion of the observed facts and information, it can be inferred that there
are several challenges faced by Super retail when seeking to expand their business in
America. The crucial challenge faced is the increasing competitive retail landscape in the
country. However, such challenges can be overcome by the adopting the appropriate
measures which have been outlined in the report.

CORPORATE ACCOUNTING SYSTEM
References list:
Bogomolova, S., Dunn, S., Trinh, G., Taylor, J. and Volpe, R.J., 2015. Price promotion
landscape in the US and UK: Depicting retail practice to inform future research
agenda. Journal of Retailing and Consumer Services, 25, pp.1-11.
Dimitri, C., Geoghegan, J. and Rogus, S., 2017. Two-stage determinants of the organic food
retailing landscape: The case of Manhattan, New York. Journal of Food Products
Marketing, 23(2), pp.221-238.
Helm, S., Kim, S.H. and Van Riper, S., 2018. Navigating the ‘retail apocalypse’: A
framework of consumer evaluations of the new retail landscape. Journal of Retailing and
Consumer Services.
Lee, K.C., 2018. Grocery shopping, food waste, and the retail landscape of cities: The case of
Seoul. Journal of cleaner production, 172, pp.325-334.
Paul, J., Sankaranarayanan, K.G. and Mekoth, N., 2016. Consumer satisfaction in retail
stores: Theory and implications. International Journal of Consumer Studies, 40(6), pp.635-
642.

CORPORATE ACCOUNTING SYSTEM
Schultz, D.E. and Block, M.P., 2015. US online shopping: Facts, fiction, hopes and
dreams. Journal of Retailing and Consumer Services, 23, pp.99-106.
So, K.K.F., King, C., Sparks, B.A. and Wang, Y., 2016. Enhancing customer relationships
with retail service brands: The role of customer engagement. Journal of Service
Management, 27(2), pp.170-193.

CORPORATE ACCOUNTING SYSTEM
Superretailgroup.com.au. (2019). Home - Super Retail Group . [online] Available at:
http://www.superretailgroup.com.au/ [Accessed 16 May 2019].