The assignment is a compulsory group assignment and is worth 20% of the marks of the subject.
The group must be comprised of three (3) students.
You must keep a copy of your assignment (in hard copy form) until you receive the marked original back. If you assignment is lost and you fail to provide us with a copy of the assignment when requested, we will assume the assignment has not been written and the penalties for late assignment will be applied.
The assignment must be presented in a professional manner (word processed).
Submissions must be properly referenced (refer to the University Style Guide).
Plagiarism is a serious matter; all students involved will be referred to the University’s appropriate authority.
Late submission will incur a penalty of one mark per day including the weekend. Late submission must be lodged with Course Coordinator only.
Application for extensions must be lodged with the Course Coordinator before due date in writing for granting an extension (medical problems etc.).
Question 1 (50 Marks)
Company boards, executives, and management are investing more and more time and resources on issues of sustainability – such as carbon (greenhouse gas emissions), energy efficient technology, water use, cleantech, and biodiversity, to name just a few. An important part of the global push towards sustainability practices involves a need to account for, and report on, sustainability – sometimes referred to as environmental, social, and governance (ESG) reporting
“Company boards, executives, and management are investing more and more time and resources on issues of sustainability – such as carbon (greenhouse gas emissions), energy efficient technology, water use, cleantech, and biodiversity, to name just a few. An important part of the global push towards sustainability practices involves a need to account for, and report on, sustainability – sometimes referred to as environmental, social, and governance (ESG) reporting (IAS Plus, 2017).
Reference:
IAS Plus (2017). Sustainability reporting and integrated reporting, Deloitte Global Services Limited.
Required:
Critically discuss the above statement by outlining why do companies should provide sustainability report in the company annual report? How is the International Integrated Reporting Council (IIRC) playing an important role in developing sustainability reporting guidelines/framework for corporations throughout the world?
Note 1: Word limit for Question 1 is 1,000.
Note 2: Professional marks will be awarded for format, clarity and expression.
Note 3: The presentation of Question 1 should include Introduction, Discussion, Conclusion and List of references.
Note 4: You will be able to collect electronic copies of articles by visiting La Trobe University Library website.
Question 2 (Word limit = 500 words) (50 Marks)
Laurence Ltd commences its operations on 1 July 2015. One year after the commencement of its operations (30 June 2016) the entity presents its first Statement of Comprehensive Income and Statement of Financial Position on 30 June 2016. The statements are prepared before considering taxation. The following information is available.
Laurence Ltd
Statement of Comprehensive Income
for the year ended 30 June 2016
$ $ Sales revenue 12,750,000 Cost of Goods Sold 6,580,000 Gross Profit 6,170,000 Expenses: Salaries and wages 1,586,000 Selling expense 65,000 Administrative expenses 1,150,000 Provision for doubtful debts 287,000 Warranty expenses 380,000 Long service leave 612,000 Depreciation expense – Property, Plant & Equipment 840,000 Insurance 290,000 5,210,000 Accounting profit for the year 960,000
Laurence Ltd
Assets and Liabilities as disclosed in the Statement of Financial Position
for the year ended 30 June 2016
$ $ Assets 192,000 Cash 1,385,000 Inventory 983,000 Accounts receivables (net) 80,000 Prepaid insurance 4,200,000 Property, Plant & Equipment– cost 840,000 Less- Accumulated depreciation 3,360,000 4,400,000 Land 10,400,000 Total assets Liabilities Accounts payables 985,500 Provision for warranty expenses 170,000 Provision for long service leave 382,000 Debentures payable 2,365,000 Total liabilities 3,902,500 Net assets 6,497,500
0ther information:
All selling, administration, and salaries and wages expenses incurred have been paid as at year-end. Laurence Ltd has some land which cost $3,500,000 and which has been revalued to its fair value of $4,400,000. Insurance was initially prepaid to the amount of $370,000. At the year-end, the unused component of the prepaid insurance amounted to $80,000. Actual amounts paid are allowed as a tax deduction. The amount of $230,000 long service leave expense has been paid. The plant is depreciated over 5 years for accounting purposes, but over 4 years for taxation purposes. Warranty expenses were accrued $380,000 and, at the year-end actual payments of $210,000 had been made (leaving of accrued balance of $170,000). Deductions for tax purposes are only available when the amounts are paid and not as they accrued. Amounts received from sales, including those on credit terms, are taxed at the time of the sale is made. The tax rate is 30 per cent.
Required:
Compute the taxable income or loss.
Complete the Taxation Worksheet on the next page in accordance with AASB 112 Income Taxes.
Prepare the applicable journal entries at 30 June 2016 to account for tax using the balance sheet method.
Laurence Ltd
Taxation Worksheet as at 30 June 2016
Item Carrying amount
$ Tax Base
$ Deductable
Temporary Difference
$ Taxable Temporary Difference
$ Tax Expense
$ Revaluation Surplus
$ Tax Payable
$ Assets Cash Accounts receivables (net) Prepaid insurance Inventory Property, Plant & Equipment– net Land Liabilities Accounts Payables Provision for long service leave Provision for warranty Debentures payable Net assets Temporary difference for year Loss carried forward Movement for the period Tax effected at 30% Tax on taxable income Income tax adjustment
