Financial Reporting ACCT2006
The assignment is to be completed by TWO students. Your answers must be typed.
You must submit section 2 of your assignment via turnitin on BlackBoard.
Section 1 – Presentation of financial statements (10 MARKS)
The adjusted trial balance of Greene Ltd as at 30 June 2017 is as follows (in random order):
Loan to Johnson Ltd (due on 30/6/2023) 398,000
Accounts receivable 1,478,000
Asset revaluation reserve as at 1/7/2016 672,000
Asset Revaluation Reserve - Land 210,000
Administrative staff salaries expense 668,000
Provision for long service leave -short term liability 228,000
Deferred tax liability 359,000
Advertising expense 248,000
Bank loan (unsecured – long-term borrowing repayment due on 30/06/2018) 168,000
Bank loan (unsecured –long-term borrowing repayment due on 1/07/2018-30/06/2023) 288,000
Carrying amount of plant and machinery sold 240,000
Accumulated amortisation – patents & trademarks 153,000
Accumulated impairment loss – goodwill 308,000
Cost of sales 3,552,000
Asset Revaluation Reserve - Held-to-maturity share investment 14,000
Deposits at call 248,000
Dividend revenue 171,000
Deferred tax asset 338,000
Provision for long service leave - long term liablility 278,000
Debentures held in Elsvier Ltd (mature on 30/5/2018) 442,000
Accumulated depreciation -
Plant & machinery 334,000
Fixtures & fittings 125,000
Underwriting commission and other share issue costs 175,000
Dividends receivable 136,000
Retained earnings as at 1/7/2016 678,000
Mortgage loan (secured over land and buildings – due 30/9/2020) 382,000
Freight inwards 218,000
Freight outwards 243,000
Ordinary shares, fully paid 3,430,000
Accounts payable 600,000
Provision for annual leave 190,000
Land (at fair value) 1,404,000
Current tax liabilities 284,000
Allowance for doubtful debts 205,000
Held-to-maturity investment (at fair value, due in 2020) 228,000
General reserve 808,000
Patents and trademarks 303,000
Income tax expense 253,000
Final dividend payable 328,000
Fixtures & fittings - at cost 246,000
Cash at bank 658,000
Sales revenue 7,366,000
Sundry revenue 302,200
Sales returns 150,000
Sales staff salaries and commission expense 628,000
7% debentures – due 30/4/2018 (secured over inventories) 213,000
Proceeds on sale of plant and machinery 200,000
Other administrative expense 498,000
Other selling expense 338,000
Plant & machinery - at cost 812,000
Preference shares, fully paid 720,000
Interest expense 196,000
Other expenses 250,000
Interest revenue 178,000
Transfer to general reserve 178,000
Interest payable 137,000
Interim dividend paid - ordinary shares 259,200
Final dividend declared – ordinary shares 228,000
Final dividend declared – preference shares 100,000
Total 19,497,200 19,497,200
i) Contributed equity as at 1 July 2016 consisted of:
? 1,000,000 ordinary shares issued at $2.23 each, fully paid $ 2,230,000
? 360,000 5% preference shares issued at $2.00 each, fully paid 720,000
ii) On 14 July 2016, a rights issue of 600,000 ordinary shares were made at $2.00 each. The underwriting commission and other shares issue costs other share issue costs amounted to $30,000.
iii) On 30 June 2016, both land and held-to-maturity investments were revaluated.
iv) An amount of $178,000 was transferred from retained earnings to general reserve.
v) Accounting policies adopted are consistent with those of the previous year.
vi) The tax rate is 30%
a) Prepare a statement of profit or loss and other comprehensive income for Greene Ltd for the year ended 30 June 2017 (classify expenses by functions). Show all workings.
b) Prepare a statement of financial position for Greene Ltd as at 30 June 2017 to comply with AASB 101. Use the current and non-current presentation format. Show all workings.
c) Prepare a statement of changes in equity for Greene Ltd for the year ended 30 June 2017 according in accordance with the requirements of AASB 101. Show all workings.
Section 2: Short analysis on a CSR related case. (10 marks)
Media articles, videos and BHP Billiton’s sustainability reports:
4. Download BHP Billiton’s 2015 and 2016 sustainability reports. In these two sustainability reports, identify reported information which relates to BHP Billiton’s non-operated joint venture operation in Brazil (Samarco).
Critically analyse BHP Billiton’s sustainability reporting practices.
1) You are required to compare the content of the two sustainability reports which relate to the company’s Samarco operation. In this section, you are expected to employ relevant theories, such as legitimacy theory and stakeholder theory, to support your findings.
2) Using publicly available information, you are also required to conduct your own research on this incident. Some links to information have been provided above, but you are encouraged to explore other reliable sources to assist with your investigation. In this section, you are expected to provide a summary of information you have found from sources other than BHP Billition’s 2015 and 2016 sustainability reports.
Your report has a STRICT word limit of 800 words.
Formatting requirements for all sections:
1. A cover sheet has been attached.
2. Before providing analysis for each question, an appropriate subtitle or heading is used to respond to each question.
3. Standard formatting requirements include using either Arial or Times New Roman font; using size 11 font; using 1.5 line spacing; using a moderate margin and portrait page orientation; and strictly adhering to the word limit.
4. In-text citations and references must be in the correct format as per the unit outline
5. A complete and correct reference list has been provided. Please note that lecture slides or other study materials provided on Blackboard are not considered to be acceptable references (we expect that you will conduct research beyond the learning materials provided to you in the unit).
RUBRICS FOR ASSESSMENT Short analysis of a CSR related case
(0-3) Meets expectations
(3-5) Meets expectations (CR) (5-7) Exceeds expectations (D)
(7-8) Exceeds expectations (HD)
1 mark The assignment is not well formatted and does not adhere to detailed requirements and referencing conventions. The assignment is reasonably well formatted, adhering to most of the detailed requirements and referencing conventions. The assignment is well formatted, adhering to most of the detailed requirements and referencing conventions. The assignment is well formatted, adhering to the detailed requirements and referencing conventions. The assignment also shows breadth of research. The assignment is well formatted, adhering to all detailed requirements and referencing conventions. The assignment also shows extensive research.
Solution to question 1
4 marks The student has failed to provide a clear outline of part 1’s requirements The student has provided an outline of part 1’s requirements and has addressed some theories. The student has provided a clear outline of part 1’s requirements and has addressed relevant theories in this particular setting. The student has provided a clear outline of part 1’s requirements and has addressed relevant theory (theories), supported by scholarly references. The student has provided a clear outline of part 1’s requirements and has applied the theory to have a better understanding of the different reporting behaviour.
Solution to question 2
5 marks The student has provided a superficial analysis of the case, which lacks supporting evidence from reliable sources. The student has provided a limited analysis and has provided some supporting evidence from reliable sources. The student has provided a reasonable analysis of the case and has provided some supporting evidence from reliable sources. The student has provided a sound analysis of the case, using evidence from reliable sources. The student has provided a comprehensive analysis of the case, using evidence from reliable sources.
TOTAL 100 (10% of course marks)