ACCG8126 - Corporate Accounting - Deferred Tax Liability - Accounting Assignment Help

Assignment Task :

Part A (ACCG8126 )

On 1 July 2019, Lowry Ltd acquired all of the assets and liabilities of Powell Ltd which constitute a business in accordance with AASB 3 ‘Business Combinations’. In exchange for these assets and liabilities, Lowry Ltd agreed to pay Powell Ltd $80,000 in cash plus 150,000 fully paid shares in Lowry Ltd.

The fair value of the shares of Lowry Ltd at the date of issue was $2.20. Costs of issuing these shares amounted to $3,000. Legal costs associated with the acquisition of Powell Ltd amounted to $2,500.

The assets and liabilities of Powell Ltd at 1 July 2019 were as follows:

Additional information:

• The assets of Powell Ltd did not include a trademark that was valued by Lowry Ltd at $50,000.

• Powell Ltd had not recorded a legal claim that could potentially result in the company paying damages to its customers. Lowry Ltd estimated the fair value of this contingent liability to be $15,000.

Required:
Prepare the journal entries in the records of Lowry Ltd at 1 July 2019 to account for the acquisition of Powell Ltd.

Part B (ACCG8126 )

The following represents an extract from the Statement of Financial Position of the assets and liabilities of Loyd Limited for the years ending 30 June 2019 and 2018.

Additional Information:

1. Interest and rent revenue are both assessable when the cash is received.

2. A deduction of 125% for development costs can be claimed when the costs are paid.

3. Doubtful debts are deductible for tax purposes when the debt is written off.

4. Loyd Ltd sold an item of equipment on 1 March 2019 for $26,000. For tax purposes the carrying amount of equipment sold was $19,000. There were no other disposals or acquisitions of equipment during the year.

5. The tax deduction for depreciation for 2019 was $18,000 and the accumulated depreciation at 30 June 2018 for taxation purposes was $65,000.

6. Long-service leave is deductible when the payment is made.

7. The current tax rate is 30%

Required:

Prepare the deferred tax worksheet for Loyd Limited for the year ended 2019 and prepare the necessary journal entries to record movements in the deferred tax accounts.

This ACCG8126: Accounting Assignment  has been solved by our Experts at My Uni Paper. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style.

Be it a used or new solution, the quality of the work submitted by our assignment experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There’s one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.