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Assume that you are a graduate accountant working for Kapland and Associates an accounting firm situated at 396 Ann Street, Brisbane, QLD 4000.
Assume that you are a graduate accountant working for Kapland and Associates an
accounting firm situated at 396 Ann Street, Brisbane, QLD 4000. The manager of your
firm, Ms Miley Jaspen has asked you to draft a letter in response to an email received
from a client - Mr Martin Wahlburg, the Managing Director of Shadow Ltd, raising 2 key
accounting issues regarding his company - see the copy of the email on the next page.
The maximum length of the covering letter is . You should then address all the
technical issues/discussion after the letter, each on separate pages as attachments ,
followed by a Reference List. The maximum word limit for all parts of the assignment
• Part A: Technical component 15% - This mark covers the technical content of your
advice and the explanation on both of the issues, the calculations and the sources
• Part B: Communication Skills - Letter Writing 5% - This mark covers the generic skills
of business letter writing; layout, clear meaning, structure and organisation,
appropriate tone and grammar, spelling and punctuation etc. throughout the whole
• Part C: Communication Skills - Presentation 10% - The individually presented 5
minute video presentation will need to keep the audience engaged, containing only
the student's advice; the presentation should be well-rehearsed and all
supplementary material, such as slides and visual aids must be of a professional
Re: Accounting Issues: Year Ending 30 June 2019
From: Martin Wahlburg (u)
Sent: 18 March 2019
To: Miley Jaspen (..au)
Thank you for your phone call this morning, as agreed I am emailing you regarding the
accounting issues we briefly discussed. By the way to assist the accounting team in our
decision-making process could you please make sure you reference any relevant sources
relating to your advice, for example, AASBs, Corporations Act, and other relevant articles
Shadow Ltd has recently obtained some patents considered useful in its manufacture of
leather handbags. The patents consist of:
• Patent HDBG459, acquired from a leather manufacturing firm for $541 000.
• Patent UBF871, obtained as part of a bundle of assets acquired from the conglomerate
Underarmour Bag Fashions for $1,500,000.
Shadow Ltd is also in the process of preparing an application for a patent for a new process
of softening leather. It has spent a number of years refining this process.
Our company accountant for Shadow Ltd is unsure how to account for patents under
AASB's. Please prepare a detailed report on the principles of how to account for patents,
using the examples above to illustrate the appropriate accounting procedures.
I have also been analysing the financial reports provided by the accountant, who has
been with the firm for a number of years. The other company directors have expressed
concern over depreciation charges being made in relation to the company's equipment.
In particular, they believe that the depreciation charges are not high enough in relation
to the factory machines because new technology applied in that area is rapidly making
the machines obsolete. The directors' concern is that the machines will have to be
replaced in the near future and, with the low depreciation charges, the fund will not be
sufficient to pay for the replacement machines. Please discuss and summarise our
options for accounting for our equipment correctly.
Please respond by letter (not email) as I would like to present this to the Board. I look
forward to hearing from you shortly.
Mr Martin Wahlburg
Managing Director, Shadow Limited
Level 5, 99 Mary Street,
Brisbane QLD 4000