University Corporate Accounting Project Report Analysis

This project report provides solutions to a corporate accounting assignment, covering multiple-choice questions and in-depth problem-solving. The assignment addresses topics such as investment valuation using the equity method, the preparation of general-purpose financial statements, and the recording of consolidation worksheet entries. It also includes detailed journal entries for business combinations, asset purchases, and depreciation calculations. Furthermore, the report explores different types of liquidation, unrealized profits, and residual value, providing definitions and explanations with relevant references. The solutions demonstrate a comprehensive understanding of corporate accounting principles and their practical application.

Project Report: Corporate Accounting

Que 1:
B) $ 18,000
Que 2:
D) General purpose financial statements
Que 3:
C) In the consolidation working papers
Que 4:
D) Plant and equipment
Que 5:
C) There is a legal right of set-off and it is permitted by a standard
Que 6:
C) 21000
Que 7:
C) Materiality
Que 8:
A) Asset revaluation surplus
Que 9:
B) Prepare and issue accounting standards
Que 10:
D) Consolidated financial statements

Que 1)
Net fair value of identifiable assets and liabilities of
White limited
100000+1360000 (Equity)
(55000) (Inventory)
(260000) (Land) $ 2,045,000
Consideration amount $ 2,700,000
Goodwill amount $ 655,000
Journal Entries
Deferred tax assets 55000
Inventory 55000
Deferred tax assets 260000
Land 260000
Accumulated impairment losses 20000
Goodwill 20000
Que 2)
Journal Entries
Management fee revenue of Wheel ltd 18000
Management fee revenue of Spoke Ltd 18000
loan from Wheel limited 13000
Loan to Spoke limited 13000
Business combination valuation reserve 5000
Deferred tax liabilities 1500
Inventory 3500
Business combination valuation reserve 2000
Deferred tax liabilities 600
Assets 1400

Que 3)
Journal Entries
Share capital-Dick Ltd 100000
Retained earnings 50000
General reserve 80000
Investment in Dick limited 165000
Business combination valuation reserve 65000
Profit Share from Lorikeet ltd 15000
Profit and loss a/c 15000
Que 4)
Journal Entries
Date Particulars Debit Credit
1/07/2013 Cash a/c
12000
0
Plant A a/c
12000
0
(Plant A has been purchased.)
1/07/2013 Cash a/c
35000
0
Plant B a/c
35000
0
(Plant B has been purchased.)
30/06/201
4 Depreciation on plant A a/c 10000
Plant A a/c 10000
(Depreciation has been levied on plant A)
30/06/201
4 Depreciation on plant B a/c 70000
Plant B a/c 70000
(Depreciation has been levied on plant B)
30/06/201
4 Accumulated depreciation a/c 10000
Depreciation on plant A a/c 10000
(Depreciation has been transferred into accumulated
depreciation)

30/06/201
4 Accumulated depreciation a/c 70000
Depreciation on plant B a/c 70000
(Depreciation has been transferred into accumulated
depreciation)
30/06/201
5 Depreciation on plant A a/c 10000
Plant A a/c 10000
(Depreciation has been levied on plant A)
30/06/201
5 Depreciation on plant B a/c 70000
Plant B a/c 70000
(Depreciation has been levied on plant B)
30/06/201
5 Accumulated depreciation a/c 10000
Depreciation on plant A a/c 10000
(Depreciation has been transferred into accumulated
depreciation)
0/01/1900 Accumulated depreciation a/c 70000
Depreciation on plant B a/c 70000
(Depreciation has been transferred into accumulated
depreciation)
Que 5)
Different type of liquidation:
Liquidation is a process in which an organization terminates its operations. Mainly
there are three ways to liquidate the organization:
 Members voluntary liquidation:
In this case, the company is solvent and all the creditors have been paid in full and the
remaining funds of the company has been transferred to the shareholders and the directors. In
this process the directors and the shareholders closes the company with huge reserve (Kaplan
and Atkinson, 2015).
 Creditors voluntary liquidation:

In this case, the company is insolvent and all the creditors have not been paid in full. In
this process the creditors pressurise closes the company.
 Court voluntary liquidation:
In this case, the directors of the creditors of the company apply in the country to closes
and liquidate the company (Madhura, 2014).
Unrealized profits:
Unrealized profit is the amount which exists on the paper in order to get from an
investment. It is a profitable state for an organization that has yet to be sold and get in
exchange the cash. Such as in case of transfer of assets among the company the company has
not generated any profit but it has been shown in the accounting books of the company (Lord,
2007).
Residual value:
Residual value is the estimated in context with the fixed assets which could be got by
the organization at the end of the life cycle of that particular assets. The residual value of
assets depends on the nature of the asset. Residual value is one of the important aspects of an
asset which impacts on the depreciation and other aspect of the company (Higgins, 2012).

References:
Higgins, R. C., 2012. Analysis for financial management. McGraw-Hill/Irwin.
Kaplan, R.S. and Atkinson, A.A., 2015. Advanced management accounting. PHI Learning.
Lord, B.R., 2007. Strategic management accounting. Issues in Management Accounting, 3.
Madura, J. 2014. Financial Markets and Institutions. Cengage Learning.