Please fine the two of attached document.

It included the following revenue and expense items. Government grant (non ‐taxable) $ 5  500 Entertainment expense (non ‐deductible) 8  200 Doubtful debts expense 8  100 Depreciation expense — plant 24  000 Insurance expense 12  900 Annual leave expense 15  400 The accounting profit before tax for Nebo Ltd for the year ended 30 June 2023 also included a gain on sale of plant of $3000. The draft statement of financial position as at 30 June 2023 included the following assets and liabilities. 2023 2022 Accounts receivable $ 156  000 $ 147  500 Allowance for doubtful debts (6  800 ) (5  200 ) Prepaid insurance 3  400 5  600 Plant 240  000 290  000 Accumulated depreciation — plant (134  400 ) (130  400 ) Deferred tax asset ? 9  990 Provision for annual leave 14  100 9  700 Deferred tax liability ? 9  504 Additional information • In November 2022, the company received an amended assessment for the year ended 30 June 2022 from the tax authority. The amendment notice indicated that an amount of $4500 claimed as a deduction had been disallowed. Narrabri Ltd has not yet adjusted its accounts to reflect the amendment. • For tax purposes, the carrying amount of plant sold was $26 000. This sale was the only movement in plant for the year. • The tax deduction for plant depreciation was $28 800. Accumulated depreciation at 30 June 2022 for taxation purposes was $156 480. • In the previous year, Narrabri Ltd had made a tax loss of $18 400. Narrabri Ltd recognised a deferred tax asset in respect of this loss. • The tax rate is 30%. Required 1. Prepare the journal entry necessary to record the amendment to the prior year’s taxation return. 2. Prepare the current tax worksheet and journal entry/entries to calculate and record the current tax for the year ended 30 June 2023. 3. Justify your treatment of annual leave expense in the current tax worksheet. 4. Calculate the temporary difference as at 30 June 2023 for each of the following assets.

Explain how these differences arise and why you have classified them as either deductible Corporate Accounting – 2020 Case study – 100 marks 2 temporary differences or taxable temporary differences: (a) plant (b) accounts receivable. Question 2 – 5 marks Walter Ltd has recently undertaken a business combination with Lily Ltd. At the start of negotiations, Walter Ltd owned 3 0% of the shares of Lily Ltd. The current discussions between the two entities concerned Walter Ltd’s acquisition of the remaining 70% of shares of Lily Ltd. The negotiations began on 1 January 20 22 and enough shareholders in Lily Ltd agreed to the deal by 30 September 20 22 . The purchase agreement was for shareholders in Lily Ltd to receive in exchange shares in Walter Ltd. Over the negotiation period, the share price of Walter Ltd shares reached a low of $5.40 and a high of $6.20. The accountant for Walter Ltd, Mr Spencer, knows that AASB 3/IFRS 3 has to be applied in accounting for business combinations. However, he is confused as to how to account for the original 30% investment in Lily Ltd, what share price to use to account for the issue of Walter Ltd’s shares, and how the varying dates such as the date of exchange and acquisition date will affect the accounting for the business combination. Required Provide Mr Spencer with advice on the issues that are confusing him. Corporate Accounting – 2020 Case study – 100 marks 3 Questio n 3 – 10 marks Barney Ltd has acquired, during the current year, the following investments in shares issued by other companies. Ted Ltd $120 000 (40% of issued capital) Mosby Ltd $117 000 (35% of issued capital) Barney Ltd is unsure how to account for these investments and has asked you, as the auditor, for some professional advice. Specifically, Barney Ltd is concerned that it may need to prepare consolidated financial statements under AASB 10/IFRS 10. To help y ou, the company has provided the following information about the two investee companies: Ted Ltd • The remaining shares in Ted Ltd are owned by a diverse group of investors who each hold a small parcel of shares. • Historically, only a small number of the sha reholders attend the general meetings or question the actions of the directors. • The current board of directors has five members, out of which three are retiring at the next annual general meeting. Barney Ltd has nominated three new directors to replace the ones that are retiring and expects that they will be appointed at the next annual general meeting. Mosby Ltd • The remaining shares in Mosby Ltd are owned by a small group of investors who each own approximately 15% of the issued shares. One of these shar eholders is Ted Ltd, which owns 17%. • The shareholders take a keen interest in the running of the company and attend all meetings. • Two of the other shareholders, including Ted Ltd, already have representatives on the board of directors who have indicated th eir intention of nominating for re -election. Required 1. Advise Barney Ltd as to whether, under AASB 10/IFRS 10, it controls Ted Ltd and/or Mosby Ltd. Support your conclusion. 2. Would your conclusion be different if the remaining shares in Ted Ltd were owned by three institutional investors each holding 20%? If so, why? Corporate Accounting – 2020 Case study – 100 marks 4 Question 4 – 60 marks Mary Ltd acquired 75% of the issued shares of Edith Ltd on 1 July 2018. In exchange for these shares, Mary Ltd gave a consideration of $26 000 cash and 10 000 shares in Mary Ltd, these having a fair value of $2 each. At this date the shareholders’ equity of Edith Ltd consisted of: At this date all the identifiable assets and liabilities of Edith Ltd were recorded at amounts equal to their fair values except for plant for which the fair value was $2000 greater than the carrying amount of $25 000 (original cost was $35 000). The plant was expected to have a further 5 -year life. The fair value of the non -controlling interest at 1 July 2018 was $15 000. Mary Ltd uses the full goodwill method. The tax rate is 30%. Assets held by Edith Ltd at 30 June 2023 include financial assets. Gains and losses on these assets are recognised in other comprehensive income. During the year ended 30 June 2023, Edith Ltd recorded g ains of $1500 on these assets. Financial information supplied by the two companies at 30 June 2023 was as follows. Mary Ltd Edith Ltd Sales revenue $ 75  000 $ 118  000 Interest revenue 375 1  000 Dividend revenue 2  700 1  000 78  075 120  000 Cost of sales (51  000 ) (87  750 ) Financial expenses (2  250 ) (3  000 ) Selling expenses (6  000 ) (9  000 ) Other expenses (2  250 ) (2  250 ) (61  500 ) (102  000 ) Profit before tax 16  575 18  000 Income tax expense (7  500 ) (8  200 ) Profit for the year 9  075 9  800 Retained earnings (1/7/22) 28  900 21  700 37  975 31  500 Dividend paid (4  000 ) (3  600 ) Corporate Accounting – 2020 Case study – 100 marks 5 Mary Ltd Edith Ltd Retained earnings (30/6/23) 33  975 27  900 Share capital 60  000 45  000 Other components of equity — 7  500 Total equity 93  975 80  400 Current liabilities 12  750 4  350 Non ‐current liabilities: Loans — 7  500 Total liabilities 12  750 11  850 Total equity and liabilities $ 106  725 $ 92  250 Plant 45  000 90  000 Accumulated depreciation — plant (25  500 ) (45  750 ) Shares in Edith Ltd 46  000 — Loans to Edith Ltd 3  750 — Inventories 13  400 23  250 Cash 21  075 750 Financial assets — 16  500 Deferred tax assets 3  000 7  500 Total assets $ 106  725 $ 92  250 Additional information (a) At 1 July 2022, Mary Ltd held inventories that had been so ld to it by Edith Ltd in the previous year at a profit of $1200. (b) During the year ended 30 June 2023, Edith Ltd sold inventories to Mary Ltd for $28 500. At 30 June 2023, Mary Ltd still had on hand inventories that had been sold to it by Edith Ltd for a profit of $1800 before tax. (c) Interest of $375 was paid by Mary Ltd to Edith Ltd on both 30 June 2022 and 30 June 2023. Required Prepare the consolidated financial statements of Mary Ltd for the year ended 30 June 2023.