Report on Corporate Accounting - Bapcor limited

Added on - 28 May 2020

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Running Head: CORPORATE ACCOUNTINGCorporate AccountingName of the StudentName of the UniversityAuthor Note
1CORPORATE ACCOUNTINGTable of ContentsRequirement i:...........................................................................................................................2Requirement ii:..........................................................................................................................3Requirement iii:.........................................................................................................................4Requirement iv:.........................................................................................................................5Requirement v:...........................................................................................................................5Requirement vi:.........................................................................................................................6Requirement vii:........................................................................................................................8References list:...........................................................................................................................9
2CORPORATE ACCOUNTINGRequirement i:The items of equity is depicted in balance sheet of Bapcor limited and it comprised ofcontributed equity, retained earnings or accumulated loss and other reserves.Contributed equity is one of elements of total equity that is recorded by organization thatis split between common stock accounts and additional paid in capital. It refers to shares thathave been bought directly by public from company either in the form of stock issuance andinitial public offerings (Nicholset al.2017).Retained earnings are the profits or cumulative earnings that are reinvested by companyin business less distributions and dividend paid to investors. It is not distributed to shareholdersby way of dividend but they are invested for in business for specific purpose.Reserves are the amount that is used to purchase fixed assets, repayment of debts andfunding expansions. Capital reserves and revenue reserves are the two types of reserves.Revenue reserves are the profits that are earned by normal operations of business. Generalreserves and special reserves are the two types of revenue reserves. Capital profits are profits thatare created out of profits that help in setting aside capital losses (Gan 2016).Total value of equity of organization increased in year 2016 to $ 366220 millioncompared to $ 266925 million in year 2015. This increase in total value of equity is attributableto the fact of increase in total reserves and contributed equity. Contributed equity value stood at$ 416427 million in year 2016 as against $ 337390 in year 2015. Other reserves value increasedfrom $ 441 million isn year 2015 to $ 845 million in year 2016. Increase in total equity value isfurther attributable to fall in accumulated loss to $ 51052 in year 2016 compared to $ 70906
3CORPORATE ACCOUNTINGmillion in year 2015(Bapcor.com.au 2018). Hence, increased in total equity value is because ofdecline in accumulated loss and increase in value of other reserves and contributed equity.Requirement ii:Income tax expense is the amount of tax payable on the taxable income of particularperiod that is based on applicable rate of income tax. Income tax expense is comprised of currenttax profits for the particular year, adjustments hat have been recognized for prior period, deferredtax expenses and relating to discontinued operations. Income tax is attributable to profit fromdiscontinued and continued operations. Expense related to income tax is depicted in theconsolidated statement of comprehensive income. Total income tax expense constitute ofdeferred tax, current tax and over provision in prior years. Income tax expense increasedconsiderably in year 2016 to $ 18534 million compared to $ 9177 million in year 2015. Therewas further increase in income tax expense to $ 25988 in year 2017. Cash outflow related topayment of income tax increased from $ 18004 million in year 2016 compared to $ 3642 millionin year 2015 (Bapcor.com.au 2018).Requirement iii:The effective income tax rate that is applicable to organization is equivalent to corporatetax rate of Australia that is 30%. Accounting income of Bapcor limited stood at $ 43582 millionin year 2016 and $ 19507 in year 2015 respectively. Higher value in year 2016 is indicative ofthe fact that there was considerable increase in accounting income of organization. Amount ofthe tax rate times the accounting income for both the years is computed at (30% * $ 43582=13074.6) for year 2016 and (30% *$ 19507= 5852.1) for year 2015. From the computation ofabove figures, it can be seen that income tax expense for year 2016 is more than $ 13074.6.
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