Part A

- An ESSAY of 1000 words (+/- 10%)

- The TOPIC - "Australian versions of international accounting standards have been mandated for reporting entities in Australia since 2005. Evaluate the impact of this Australian Government policy decision to adopt IFRS by assessing the changes in recognition and disclosure requirements for intangible assets, including goodwill and research and development."

- Your essay should be word-processed in Times New Roman 12 point font, double line-spaced and appropriately presented and referenced. Note: your reference list entries should be in alphabetical order of authors' surnames, be double line-spaced between entries and single-spaced within entries.

Parts B and C

This section of the assignmentshould be completed in Microsoft Word and be formatted in a suitably professional manner including an appropriate font (12) and portrait orientation. A penalty of up to 10% of the available marks may apply for failure to adhere to this requirement.

Part B- Share Issue and Forfeiture

A newly registered company, Gilt Edge Investments Ltd, has issued a prospectus dated 1 January 2016 inviting the public to apply for the following class of shares:

- 400,000 Ordinary shares at $5 per share. The terms of the shares on issue are $2.50 on application, $1.50 on allotment, $0.50 on the first call and $0.50 on the second call.

If the issue is oversubscribed the directors will make a pro-rata issue of shares and the excess application money will be applied to allotmentand calls before any refunds will be given.

On 28 February 2016 applications closed and applications had been received for 500,000 shares in total, with applications for 100,000 shares paying $5, applications for 200,000 shares paying $4.00 and the remainder paying only the application fee.

On 28 March the shares were allotted, with all allotment money owed paid by 15 April. On28March share issue costs of $20,000 for the ordinary shares were also paid. The share issue costs related to legal expenses associated with the share issue and fees associated with the drafting and advertising of the prospectus and share issue.

On 1 May the first call is made on the shares and on 1 June the call money was received except for the call on 12,000 shares. The shares were forfeited on 15 June. On 20 June the $5shares were reissued at $4 paid to $4.50. Costs associated with reissuing the forfeited shares totalled $4,000, this amount being paid on 25 June.On 30 June the balance of monies owing was refunded to the defaulting shareholders.

Required:

Prepare journal entries for the above transactions. Narrations are required. Note: entries should be in strict date order of the underlying event. Show all workings, including an appropriate schedule to account for the oversubscription. These should be appended to Part B.
 
Part C-Company Tax Schedules

AMC (Sales)Ltd began operations on 1 July 2015 by purchasing an existing business for $350,000. The fair values of the assets of the purchased business were as follows:

The excess of the purchase consideration over the fair value of the assets acquired was recorded as goodwill.

The depreciation rates and methods for the financial reports and the company income tax return respectively are listed below. The company income tax rate is 30%.

During the first year of operations, the company recognised the following transactions which are treated differently for tax and accounting purposes:

- Cash payments of $19,000 for insurance were made during the year.
- Rent is paid for in arrears. $4,600 has been paid in cash.
- Long Service Leave of $8,000 was provided for during the year. No leave has been taken
- Allowance for Impairment for Accounts Receivable was $2,000. No debts were written off as bad during the year.

Items in the income statement which were treated the same for accounting and tax purposes were:
- Sales $450,000
- Cost of Goods Sold $228,000
- Salaries and Wages $42,000
- Other expenses $9,600

Other items in the statement of financial position as at 30 June 2016 are:

Required:

a) Prepare a schedule that shows the calculation of taxable income and current tax liability for AMC (Sales) Ltd for the year ending 30 June 2016 and provide the relevant journal entry. Exclude journal narrations.

b) Prepare a worksheet that shows the calculation of deferred tax liabilities and deferred tax assets for AMC (Sales) Ltd as at 30 June 2016. Provide journal entries to record the deferred tax assets (if any) and deferred tax liabilities (if any). DO NOT apply the requirements of AASB 112 Income Taxes with respect to offset. Exclude journal narrations.